2002 health care spending hit $1.6 trillion

Signs point to a possible slowdown in future growth, but plenty of room for improvement remains, experts said.

By Joel B. Finkelstein, AMNews staff. Jan. 26, 2004.

Washington -- The nation's health care tab rose again in 2002, stimulating new debate over what needs to be done to control future spending growth.

Spending on health care came to $1.6 trillion in 2002, an increase of 9.3% over 2001, said officials from the Centers for Medicare & Medicaid Services. Health care costs ate up 14.9% of the U.S. gross domestic product.

In 2002, health care spending grew faster than available resources, forcing the government, companies and consumers to dig deep to finance these costs, said Katharine Levit, director of the CMS National Health Statistics Group.

But the rampant growth already could be ebbing. Changes in the economy usually take two to three years to actually affect the health care sector, Levit said. "With the recession that began in 2001, this means we should probably begin to see some slowdown in spending," she said.

Other factors, such as the move to push more insurance costs onto workers and initiatives to boost health care efficiency, also might help to bring health spending growth more in line with the gross domestic product, experts said.

"While this is the fastest increase in a decade, and it's troubling, there's reason to believe that we're beginning to slow down and that it won't continue at this rate," said Karen Davis, president of the Commonwealth Fund, New York City.

More than half of health care spending goes to hospitals and doctors, but prescription drugs and health insurance profits eat up more than their share of dollars.