Fuelled by surging prescription drug and hospital costs, health care spending in the US in 2000 soared by 6.9%, to more than US$1.3 trillion. It is the biggest 1-year increase in almost a decade.
The sudden surge in health spending, which outpaced the 6.5% increase in overall national productivity, signalled what some economists fear will be a time of renewed health cost inflation, with increased health care premiums, greater out-of-pocket health spending by consumers, increased reluctance of employers to offer health insurance and a swelling in the ranks of the more than 40 million uninsured Americans.
According to a report prepared by the US Center for Medicare and Medicaid Services (CMMS), the resurgent costs (increases had been relatively small since 1993) were mainly attributable to a 17.3% increase in prescription drug spending, which has already driven many Americans to Canada in search of cheaper prescription drugs (CMAJ 2001;164[2]:244-5), and a 5.1% increase in hospital costs.
The bottom line is that health care spending averaged US$4637 per capita in 2000, with health care now accounting for 13.2% of the nation's gross domestic product (GDP). According to the Canadian Institute for Health Information, Canada's health spending increased by 7.1% in 2000 and accounted for 9.1% of the GDP; per capita spending totalled Can$3116. This includes all public and private spending. (In 2001, Canada's health care spending increased by 7.1%, to $102.5 billion.)
Katherine Levitt, chief author of the CMMS report, expects these spending trends to continue, with the current resurgence marking “the end of an era of reasonable health care cost growth through the 1990s.”
The report attributes the increased spending, particularly on prescription drugs, to several factors: an aging population, broader coverage of drugs in health insurance plans, the introduction of newer, higher-priced drugs and the significantly increased consumer demand for drugs because of aggressive direct-to-consumer advertising.
Cynthia Smith, a coauthor, says that when the dust settles “those who are uninsured are going to have a difficult time paying for care, and those who are insured are looking at higher premiums.” — Milan Korcok, Florida