Tracking Health Care Costs: Spending Growth Slowdown Stalls in First Half of 2004

Abstract

This paper provides a mid-year update on health care spending in the United States, and finds that the brief respite from faster-growing health care costs sputtered in the first half of 2004 as health costs per privately insured American grew 7.5 percent - virtually the same rate as in 2003. Private-sector spending on health care constitutes more than half of all health care spending, and both the private and public sectors are subject to similar cost pressures. The study analyzes per capita spending on health care services - inpatient and outpatient hospital care, physician services, and prescription drugs - commonly covered by private insurance. Per capita health care spending trends - also often referred to as cost trends - are important because they largely determine future health insurance premium trends. The study's findings were released jointly by the Center for Studying Health System Change (HSC) and the Employee Benefit Research Institute (EBRI).

Keywords: Health care costs, Hospital costs, Prescription drug costs

JEL Classification: I1, J3