The nation's outlays on health climbed to $604.1 billion in 1989, an increase of 11.1 percent over 1988, Health and Human Services Secretary Louis W. Sullivan reported yesterday.
Sullivan, noting that health outlays by all public and private sources have been rising faster than general inflation for years, said, "This continuing trend is alarming because steep increases in health costs are limiting access to health care and imposing a heavy burden on individuals, industries and government."
Health outlays as a share of gross national product rose from 11.2 percent in 1988 to 11.6 percent in 1989, the highest figure for any developed nation. In 1960, the United States spent only 5.3 percent of GNP on health. The amount spent last year averaged $2,354 per person.
"The ability of society to meet other needs is affected by the growing share of economic resources claimed by health expenditures," said Gail R. Wilensky, administrator of the Health Care Financing Administration, which runs the Medicare and Medicaid programs.
Concerned about continuing growth of health outlays, the Office of Management and Budget is considering including in President Bush's budget for fiscal 1992 a proposal to cut about $20 billion from projected Medicare fees to hospitals and doctors over the next five years, according to documents obtained by The Washington Post.
The OMB also is considering establishing a computerized system to collect information on which Americans have private or employer-based health insurance and make sure that the private insurance, when required by law, pays medical bills before Medicare and other government programs are charged. Medicare program officials have complained for years that many private insurers are ignoring their liability and allowing Medicare to pay bills for which it is supposed to be the secondary payer.
Under the OMB proposal, employers would be required to show on Internal Revenue Service W-2 forms which employees are covered by insurance.