NCPA - National Center for Policy Analysis

Health Spending Surged in 2000

January 8, 2002

National health spending in 2000 registered the largest one-year percentage increase since President Clinton proposed to guarantee health insurance for all Americans in 1993, according to new figures from the Department of Health and Human Services (DHHS).

  • Spending shot up by 6.9 percent in 2000 -- to $1.3 trillion.
  • Health care accounted for 13.2 percent of the nation's total output -- up from 13.1 percent in 1999 and 12 percent in 1990.
  • Hospital and drug costs were the main factor in the latest rise -- as well as more spending on Medicare and resistance to the restraints of managed care.
  • Each American consumed an average of $4,637 for health care in 2000 -- up from $4,377 in 1999, $4,001 in 1997, and $2,966 in 1991, not adjusting for inflation.

Spending on hospital care and prescription drugs accounted for 45 percent of the 2000 increase of $83.9 billion.

Total national spending on prescription drugs doubled in the five years from 1995 to 2000 -- and tripled in the decade from 1990 to 2000.

Although consumer groups and employers sporadically issue reports on rising drug prices and insurance premiums, the DHHS report is seen as more authoritative and comprehensive.

Source: Robert Pear, "Propelled by Drugs and Hospital Costs, Health Spending Surged in 2000," New York Times, January 8, 2002.  


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