HEALTH CARE SPENDING accounted for 16 percent of gross domestic product in 2005, according to government figures published in the journal Health Affairs. That figure is up slightly from 15.9 percent in 2004, and amounts to $6,697 for every American, but it shows health care costs growing at their slowest pace since 1999. It marked the third consecutive year health spending grew at a slower pace than the previous year. Such spending still amounts to nearly $2 trillion.
Health Affairs reports that a decline in the growth of prescription drug spending was a factor in the spending slowdown. Spending for hospital, physician and clinical services rose at rates similar to 2004, causing the percentage of personal income that goes for health care to rise. The report says onefifth of all U.S. health spending in 2005 was used for physician and clinical services.
"Although health spending and overall economic growth have converged, it is unclear whether this is temporary or indicative of a longer-term trend," said Aaron Catlin, the report's lead author and an economist with the Centers for Medicare and Medicaid Services.
Consumers are bearing a larger portion of health care spending than before, says the report. Consumers spent $249.4 billion out of pocket in 2005, up almost $25 billion since 2003. And while spending for prescription drugs has slowed, it still comprises 20.4 percent of consumer out-of-pocket spending.
A separate article in the same issue of Health Affairs centered on health spending concentration. It found that health care spending has become less concentrated among the top spenders in the past decade. Article authors cite prescription drugs as the cause. As prescription drug costs have become a larger portion of health care dollars, health care spending concentration has been reduced, since prescription drug spending is more evenly distributed throughout the population.
Among the top 5 percent of spenders, spending dropped seven percentage points, from 56 percent of total spending in 1996 to 49 percent in 2003.
"This pattern suggests that efforts to encourage price sensitivity in prescription drug spending, such as tiered formularies or high-deductible insurance plans, could have more potential for cost saving than was the case 10 years ago," said Samuel Zuvekas, the lead author and an economist at the Agency for Healthcare Research and Quality.
