Bradley C. Strunk

Tracking health care costs: Trends stabilize but remain high in 2002

Health care spending per privately insured person increased 9.6 percent in 2002, a slight reduction from the 10 percent increase in 2001. This is the first time in five years that the spending trend did not accelerate. Nonetheless, health care spending grew nearly four times faster than the U.S. economy grew in 2002. Growth in hospital spending accounted for the largest portion of the overall increase (51 percent) for the second straight year. Moreover, hospital price inflation--which accelerated significantly in 2002--accounted for a larger share of hospital spending growth in 2002 than in 2001. Premium increases accelerated again in 2003, despite 2002s slight deceleration of the overall spending trend.

Tracking health care costs: Trends turn downward in 2003

Health care spending per privately insured person increased 7.4 percent in 2003. While lower than the 2002 increase, it still outpaced growth in the overall economy by a margin that exceeds the historical average. The trend for drug spending decelerated the most. Meanwhile, hospital spending grew 9 percent in 2003-1.8 percentage points less than the 2002 increase. This reflected a sharp deceleration in growth of hospital use, while growth in hospital prices accelerated for the sixth year in a row. The trend for health insurance premiums fell in 2004. Employers raised patient cost sharing for the third year in a row.