Skip to main content

Advanced Search

Advanced Search

Current Filters

Filter your query

Publication Types



Newsletter Article


Study: Health Spending Continues to Outpace Economic Growth

Health care costs for privately insured Americans grew 8.2 percent in 2004, virtually the same rate as in 2003, according to a study released Tuesday by the Center for Studying Health System Change.

Health spending growth continued to outpace overall economic growth by a wide margin—2.6 percentage points—in 2004, despite a robust 5.6 percent increase in the overall U.S. economy as measured by per capita gross domestic product, according to the study, which was published Tuesday as a Web exclusive in the journal Health Affairs.

After peaking at 11.32 percent in 2001, health care spending growth slowed in 2002 and 2003 but now has leveled off at a relatively high rate, according to the center, a nonpartisan policy research organization funded principally by The Robert Wood Johnson Foundation.

"If health care spending continues to grow at a significantly faster rate than workers' incomes—and there's every sign that it will—health insurance will become unaffordable to more and more people," center president and study co-author Paul B. Ginsburg said in a news release.

In 2005, estimated average premium increases ranged from 8 percent to 10 percent, down from an average 12 percent in 2004. And for the fourth year in a row, although to a lesser degree than in recent years, employers in 2005 increased patient cost sharing through higher deductibles, copayments, and coinsurance as a way to cope with high premium increases.

Other Key Study Findings

  • Prescription drug spending per privately insured person increased at a slower pace, growing 7.2 percent in 2004 compared with 8.9 percent in 2003 and less than half the 1999 peak of 18.1 percent.
  • Spending on outpatient hospital care, increased 11.3 percent—keeping it the fastest-growing category of health spending for the firth year in a row—compared with 11.1 percent in 2003.
  • Spending on physician care increased 6.4 percent in 2004, identical to the 2003 growth rate.

Publication Details