Record Share Of Economy Spent on Health Care

Cynthia Smith of the Centers for Medicare and Medicaid Services, lead author of the health spending report, attributed the slower increase in drug spending to greater use of generic drugs and mail-order pharmacies, a slowdown in the introduction of costly new medications, and the impact of higher drug co-pays. Mark Merritt, president of the Pharmaceutical Care Management Association, which represents drug benefit managers, said the trend was also a result of their "work over the past decade to change the way consumers, clinicians and purchasers think about prescription drugs."

Although the fast rise in drug spending in the past decade attracted great attention from officials and health policy experts, it remains a relatively small part of the health care bill -- about 10 percent.

Defenders of increased drug spending have often argued that those added costs would keep people healthier and reduce the amount spent on hospitals and doctors. The 2004 statistics told a different story, however, with an increase in doctor costs of 9 percent from 2003 and an increase in hospital costs of 8.6 percent. The report's authors said the jumps appeared to be associated with higher Medicare reimbursement rates for some doctors and, anecdotally, to an upswing in construction of new hospitals.

"This is an alarming situation, but it's more like a creeping infection than a broken bone, and so people get used to it," said Edward Howard, executive vice president of the Alliance for Health Reform, a nonprofit education group chaired by Sens. John D. Rockefeller IV (D-W.Va.) and Bill Frist (R-Tenn.). "Frankly, I don't see major change until people who have some sort of organized political influence start hurting a little more."

In addition to the report on costs, a different agency yesterday released two new annual reports mandated by Congress on the quality of health care and disparities in care. Officials called them the most comprehensive assessments of their kind.

For the report by the Agency for Healthcare Research and Quality, researchers compiled data from dozens of sources collected by the federal government and others to create 179 quality measures, including 46 "core" measures.

The researchers concluded that the overall quality of care in 2005 had improved at a rate of 2.8 percent from 2003. That was the same increase as the year before, and many measures showed no improvement or even decreases.

For example, there was improvement in the percentage of patients with high blood pressure whose condition was under control, but no improvement in providing speedy treatment to people having heart attacks.

In the second report, the National Healthcare Disparities Report, researchers found more measures on which the quality gap between whites and racial minorities was shrinking than widening. But the report found that major disparities remained for all groups and that the gap had widened for Hispanics.

Of disparities experienced by blacks, 58 percent were narrowing and 42 percent were widening, the researchers found. For Hispanics, 41 percent of disparities were narrowing, whereas 59 percent were becoming larger.