Report Estimates Health Care Cost Increase at $621 Billion Since 2000, USA

Main Category: Public Health
Article Date: 10 Feb 2005 - 11:00 PDT


Health care spending in the United States has increased by $621 billion since 2000 to $1.9 trillion this year, and current expenditures for health care services account for about 24% of the increase in the gross domestic product between 2000 and 2005, according to a report by researchers at the... Boston University School of Public Health, the Los Angeles Times reports (Alonso-Zaldivar, Los Angeles Times, 2/9). The report, by Alan Sager and Deborah Socolar, uses government data and the results of previously conducted studies. The researchers found that health care costs will account for 15.5% of the nation's economy in 2005, compared with 13.2% in 2002 (Colliver, San Francisco Chronicle, 2/9). The report found that per capita health care spending in the United States on average is double that of Canada, France, Germany, Italy and Britain, which provide universal health coverage to residents. The report stated, "Current U.S. spending should be adequate to cover all Americans."

Explanations for Cost Increases
According to the report, doctors receive or determine how to spend 87% of health care spending, with tests and services ordered by doctors comprising 66% of health care spending and doctors' fees accounting for 21% (Los Angeles Times, 2/9). In addition, researchers estimated that "waste, excessive prices and fraud" account for about half of health care spending, the Chronicle reports. Sager estimates that health care costs could be reduced by more than $300 billion in 2005 if "even a third of waste" was eliminated (San Francisco Chronicle, 2/9). The report also stated that about 10% of the U.S. population is responsible for 70% of its health care costs and that health savings accounts might encourage healthy residents to forgo necessary care (Los Angeles Times, 2/9).

Comments
Sager said, "To squeeze out the waste, we have to enlist the active and willing cooperation of doctors," citing the example of Kaiser Permanente health plans (Strahinich, Boston Herald, 2/9). He added, "We know there is enough money to take care of everyone, but not if we keep practicing blank-check mentality and using costs controls that have failed for decades." Gary Claxton, a vice president with the Kaiser Family Foundation, said, "There's no doubt that some of the things we do in the health care system we don't need to be doing. But we also know there's a whole bunch of things people need but we don't do for them." He added, "You can't just count one side of it" (San Francisco Chronicle, 2/9).

"Reprinted with permission from kaisernetwork.org kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation . © 2005 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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