[From the diaries by susanhu.] A new report titled Tracking Health Care Costs: Declining Growth Trend Pauses In 2004 highlights that while medical costs have slowed their increases, these increases are still far faster than inflation and the pace of wage increase:
“Health care spending increased 8.2 percent in 2004. This was virtually unchanged from 2003, which suggests that health care cost trends have stabilized. Hospital spending grew 10.1 percent in 2004, also virtually unchanged from 2003, reflecting a small increase in the hospital utilization trend and a small decline in hospital price inflation. Meanwhile, growth in prescription drug spending continued to fall as a result of slower growth in prices. Growth in health insurance premiums slowed again in 2005, likely reflecting earlier years’ slowing in cost trends and signaling that a turn in the insurance underwriting cycle might be under way.”
“The trend in private health insurance premiums slowed in 2004 after a long period of acceleration culminating in a peak increase of 13.9 percent in 2003. Nevertheless, premium growth continues to outpace growth in the economy and workers’ incomes by a wide margin, making health care benefits increasingly unaffordable for employers and employees alike. The high rate of growth in premiums is primarily the result of rapid growth in the health spending that underlies private health insurance premiums–that is, the cost of services typically covered by private health insurance. Underlying cost trends are the dominant long-term determinant of premium trends.”
The Report also highlights the following price trends.
Spending on prescription drugs increased 7.2%, while prescription drug prices increased 3.3%
Hospital prices increased 7%.
Hospital Outpatient appending Increased 11.3 while inpatient spending increased 6.2%.
The report stated that health spending “stabilized at 8%”. This indicates the US can expect this rate of spending increases to continue for the foreseeable future. Consider this fact from the following perspective: real wage growth has been stagnant for the last few years. Therefore, health spending is taking a greater proportion of the average person’s salary. And that continued increase is not going to slow down anytime soon.
So, why all this attention on health care? It’s not as sexy as the Downing Street Memo and talk about impeachment. Let’s get back to the real issue of the day.
Here’s the answer. In a recent CBS news survey, 28% of the respondents stated health care was the most important domestic issue, making it the number one main concern of Americans. People could care less about the DSM; what they do care about is how are they going to deal with the ever-increasing costs of staying healthy. And no one is talking to these people about their real concerns.
