Growth in spending stable in ’97
Health care spending in the United States rose only 4.8% in 1997, the slowest increase in almost 40 years, according to a report released by the Health Care Financing Administration (HCFA). HCFA reports that health care spending in 1997 totaled $1.1 trillion, with per-person spending, on average, at just under $4,000.
Longer-term HCFA estimates, however, anticipate that health care spending will grow more rapidly in the coming years.
The report by HCFA analysts shows that the gap between health spending paid for by public and private sources inched closer in 1997, continuing a trend that began in 1990. Private funding paid for 53.6% of health care in 1997 ($585.3 billion), down from 59.5% in 1990, while public programs, including Medicare and Medicaid, paid for 46.4% of health care in 1997, up from 40.5% in 1990.
Spending down in private sector
The overall slowdown in health care spending has been driven largely by rapidly falling growth in private spending, which reached an all-time low growth rate of 2.3% in 1994. In addition, since 1994, the rate of spending from public funding sources, primarily Medicare and Medicaid, has slowed, contributing to lower overall spending growth.
Total Medicaid spending increased only 3.8% in 1997, to $159.9 billion, the slowest growth since Medicaid’s inception nearly 30 years ago. Preliminary data suggest the slowdown can be attributed to decreases in Medicaid enrollment in 1995, 1996, and 1997, as well as reductions in the rate of spending growth per enrollee.
Expenditures for hospital care accounted for 38% of personal health care spending and were the slowest-growing service, increasing only 2.9% to $371 billion in 1997. Spending for physician services increased 4.4% in 1997, continuing a trend of single-digit growth started in 1992.
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