GOVERNMENT & MEDICINE

U.S. health spending hit $1.7 trillion in 2003

Government officials vow to do more this year to rein in expenditures on care.

By Joel B. Finkelstein, AMNews staff. Jan. 24, 2005.

Washington -- The increase in U.S. health spending slowed somewhat in 2003, but it is still too early to tell whether the change reflects a trend.

The rate marked the first deceleration in national health spending growth in seven years, said Cynthia Smith, an economist with the Centers for Medicare & Medicaid Services and lead author of a report on the subject published in the January/February issue of Health Affairs.

U.S. health expenditures rose by 7.7% in 2003 to nearly $1.7 trillion, and for the first time exceeds 15% of the gross domestic product. Health spending grew by 9.3% in 2002.

"This is good news for the public and our health care system and is the result of changes designed to slow down the growth in spending," said Health and Human Services Secretary Tommy G. Thompson. "But we have more to do before we can declare victory over rising health care costs."

Much of the slowdown can be tied to cuts in public health spending, which reduced growth in that area to 6.3% in 2003. Many of those were one-time cuts, making it unpredictable whether the slide will be sustained, Smith said.

"The administration and the Congress have taken important steps in recent years to contain costs in our major health care programs, while improving the quality of care that patients receive," said CMS Administrator Mark B. McClellan, MD, PhD. "And as we implement the new Medicare law, we intend to do even more in the year ahead."

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