Growth in U.S. Health Care Spending Slows

Private-side drug spending, which represents almost three-quarters of the total, also slowed, from 7.2 percent in 2004 to 6 percent in 2005. In addition, the growth of health-care premiums continued to decline for the third straight year in 2005, giving the slowest rate of growth since 1997.

Employers assumed 74.4 percent of the bill for private health insurance in 2005 and employees 25.6 percent. Employer share is slightly higher than it was in 2005, but well below the levels of 1999.

A second study in the journal found that the degree of concentration of health-care expenditures in the United States has declined after a long period of stability.

"Declining concentration coincides with a really rapid increase in prescription drug spending," said Samuel H. Zuvekas, lead author of that report and a senior economist with the Agency for Healthcare Research and Quality. "That's important because prescription drug spending is diffused over a larger proportion of the population compared with inpatient services."

But while this may seem like good news, any celebration is premature, according to Karen Davis, president of The Commonwealth Fund, a private, nonpartisan foundation that supports independent research on health and social issues.

The United States still spends more than twice per person per year than what other industrialized countries spend on health care, the group said in a statement released Tuesday. Even the slower spending growth continues to outpace inflation and growth in wages for the average U.S. worker.

Another report issued last week by The Kaiser Family Foundation, a nonprofit foundation focusing on the major health-care issues facing the nation, found that the United States spent at least three percentage points higher of GDP on health care than any of 19 developed countries studied, all of which provide universal health coverage to their citizens.

More information

The Agency for Healthcare Quality and Research has more on health care costs.

SOURCES: Aaron Catlin, economist, U.S. Centers for Medicare and Medicaid Services; Stephen Heffler, director, National Health Statistics Group, Centers for Medicare and Medicaid Services; Cathy Cowan, economist, Centers for Medicare and Medicaid Services; Samuel H. Zuvekas, Ph.D., senior economist, Agency for Healthcare Research and Quality; Mark Rukavina, executive director, The Access Project, Boston;Health Affairs; Jan. 9, 2007, statement, Karen Davis, president, The Commonweath Fund, New York City