Health care spending per privately insured American increased 7.4 percent in 2003

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Jul 2 2004

Health care spending per privately insured American increased 7.4 percent in 2003—the first major slowdown in spending growth in nearly a decade. Nonetheless, health spending grew nearly twice as fast as the overall economy in 2003 (see Table 1).

While still extremely high, the rate of health spending growth slowed for the second year in a row in 2003, down from 9.5 percent in 2002 and 10 percent in 2001. Trends in all four spending categories—inpatient and outpatient hospital care, prescription drugs, and physician services—continued to slow in 2003. Moreover, the decline in spending growth appeared to slow growth in employersponsored health insurance premiums to an average 12 percent in 2004, marking the first downtick in premium growth since 1996.

TABLE 1: Annual Change Per Capita in Health Care Spending and Gross Domestic Product, 1994-2003
	Spending on Type of Health Care Service
Year	All Services	Hospital Inpatient	Hospital Outpatient	Physician	Prescription Drugs	Gross Domestic Product (GDP)
1994	2.1%	-2.0%	8.7%	1.7%	5.2%	4.9%
1995	2.2	-3.5	7.9	1.9	10.6	3.4
1996	2.0	-4.4	7.7	1.6	11.0	4.4
1997	3.3	-5.3	9.5	3.4	11.5	5.0
1998	5.3	-0.2	7.5	4.7	14.1	4.1
1999	7.1	1.6	10.2	5.0	18.4	4.8
2000	7.8	4.1	9.8	6.3	14.5	4.8
2001	10.0	8.7	14.6	6.7	13.8	1.8
2002	9.5	8.4	12.9	6.5	13.2	2.7
2003	7.4	6.5	11.0	5.1	9.1	3.8
Notes: GDP is in nominal dollars. Estimates may differ from past reports due to data revisions by Milliman USA and the Bureau of Economic Analysis. Sources: Health care spending data are the Milliman USA Health Cost Index ($0 deductible); GDP is from the U.S. Department of Commerce, Bureau of Economic Analysis