National Health Expenditures in 1997: More Slow Growth

Health Affairs

Volumn 17, Issue 6, 1998, Pages 99-110

  Levit, Katharine ^a   Cowan, Cathy ^a   Braden, Bradley ^a   Stiller, Jean ^a   Sensenig, Arthur ^a   Lazenby, Helen ^a  

^a NONE

Author keywords

[No Author keywords available]

Indexed keywords

ARTICLE; HEALTH CARE COST; INFORMATION PROCESSING; STATISTICS; UNITED STATES;

DATA COLLECTION; HEALTH EXPENDITURES; UNITED STATES;

EID: 0342331290     PISSN: 02782715     EISSN: None     Source Type: Journal    
DOI: 10.1377/hlthaff.17.6.99     Document Type: Article

References (46)

1. Volume and intensity include factors associated with aging of the population. Aging will not have a major effect on spending until approximately 2015. S. Burner and D. Waldo, "National Health Expenditure Projections, 1994-2005," Health Care Financing Review (Summer 1995): 221-242.
2. Almost 90 percent of hospital spending was in community hospitals in 1997; 66 percent of community hospital revenues came from inpatient services; 4 percent of hospital spending was in nonfederal, noncommunity hospitals such as psychiatric hospitals, and 6 percent in federal hospital facilities such as those operated by the Departments of Defense and Veterans Affairs.
3. American Hospital Association, National Hospital Panel Survey, various years.
4. Ibid.
5. U.S. Bureau of Labor Statistics information, on the World Wide Web at www.hcfa.gov/stats/ indicatr/indicatr.htm (September 1998).
6. According to the AHA National Hospital Panel Survey, profit margins in the early prospective payment system (PPS) period (1983-1984) were slightly higher at 6 percent than those recorded during the 1990s (5-5.5 percent).
7. The remaining portions were funded by other federal government agencies such as the Departments of Defense and Veterans Affairs; state and local subsidies to hospitals; and other private funding, including philanthropy.
8. C. Kane et al., "Physician Managed Care Contracting," in Socioeconomic Characteristics of Medical Practice, 1997/98 (Chicago: American Medical Association, 1998), 7-16; and D. Emmons and C. Simon, "Managed Care: Evolving Contractual Arrangements," in Socioeconomic Characteristics of Medical Practice, 1996 (Chicago, AMA, 1997), 15-26.
9. C. Kane et al., "Physician Managed Care Contracting," in Socioeconomic Characteristics of Medical Practice, 1997/98 (Chicago: American Medical Association, 1998), 7-16; and D. Emmons and C. Simon, "Managed Care: Evolving Contractual Arrangements," in Socioeconomic Characteristics of Medical Practice, 1996 (Chicago, AMA, 1997), 15-26.
10. Ibid.
11. Calculated by the authors using data from the AMA, Socioeconomic Characteristics of Medical Practice, 1997/98, 107.
12. P. Kletke, "Trends in Physician Practice Arrangements," in Socioeconomic Characteristics of Medical Practice, 1997/98, 17-24.
13. Income for employed physicians may be understated, since most also receive noncash compensation. J. Moser, "Physician Income Trends in the Last Ten Years," in Socioeconomic Characteristics of Medical Practice, 1997/98, 29-37.
14. L. Tanner, "Recruiters Target More Specialists, Survey Says," Dallas Business Journal, 27 August 1998.
15. L. Tye, "Shortage of Doctors Turns into a Surplus," Boston Globe, 3 September 1998; and R. Miller et al., "Employment-Seeking Experiences of Resident Physicians Completing Training during 1996," Journal of the America Medical Association (2 September 1998): 777-783.
16. L. Tye, "Shortage of Doctors Turns into a Surplus," Boston Globe, 3 September 1998; and R. Miller et al., "Employment-Seeking Experiences of Resident Physicians Completing Training during 1996," Journal of the America Medical Association (2 September 1998): 777-783.
17. J. Graham, "Medical School Applicants Dip; Costs, Working Conditions May Explain Drop," Chicago Tribune, 1 February 1998; Association of American Medical Colleges, "Why Are Some Schools Less Vulnerable to a Declining Applicant Pool?" Contemporary Issues in Medical Education, www.aamc.org/meded/edres/cime/vollno2.pdf (10 September 1998).
18. J. Graham, "Medical School Applicants Dip; Costs, Working Conditions May Explain Drop," Chicago Tribune, 1 February 1998; Association of American Medical Colleges, "Why Are Some Schools Less Vulnerable to a Declining Applicant Pool?" Contemporary Issues in Medical Education, www.aamc.org/meded/edres/cime/vollno2.pdf (10 September 1998).
19. C. Ukens, "Benefit Boost: Health Plan Rx Costs Rise One-Third, Study Reports," Drug Topics (4 August 1997): 51.
20. C. Baker and N. Kramer, "Employer-Sponsored Prescription Drug Benefits," Employer Benefits Survey: A BLS Reader, U.S. Department of Labor, Bureau of Labor Statistics Bulletin 2459 (Washington: U.S. Government Printing Office, February 1995).
21. Pharmacy Benefit Report: Facts and Figures (East Hanover, N.J.: Novartis Pharmaceuticals Corporation, 1997), 10.
22. IMS America, Data from the National Prescription Audit (Plymouth Meeting, Pa.: IMS America, 1998). A better utilization measure would be counting a day's supply of a drug rather than the number of prescriptions dispensed. However, data on this measure are not currently available.
23. Express Scripts Online, "ValueRx Report Identifies Reasons for the Rapid Increase in Pharmacy Expenses - 1997 Drug Trend Report Analyzes Prescription Drug Costs and Trends," www. express-scripts.com/esi/news/trends97.asp (September 1998).
24. F. Gebhart, "Annual Rx Survey: The New Golden Age," Drug Topics (16 March 1998): 71.
25. E. Tanouye, "Managed Care Is Boosting Drug Sales," Wall Street Journal 17 October 1996, B10.
26. J. Genuardi, J. Stiller, and G. Trapnell, "Changing Prescription Drug Sector: New Expenditure Methodologies," Health Care Financing Review (Spring 1996): 191-204.
27. T. Bodenheimer and K. Sullivan, "How Large Employers Are Shaping the Health Care Marketplace," New England Journal of Medicine (2 April 1998): 1003-1007.
28. B. Smith, "Trends in Health Care Coverage and Financing and Their Implications for Policy," New England Journal of Medicine (2 October 1997): 1000-1002.
29. U.S. General Accounting Office, Medicaid: Sustainability of Low 1996 Spending Growth Is Uncertain, Pub. no. GAO/T-HEHS-98-62 (Washington: GAO, February 1998).
30. J. Holahan and D. Liska, "The Slowdown in Medicaid Spending Growth: Will It Continue?" Health Affairs (March/April 1997): 157-163.
31. Personal Responsibility and Work Opportunities Reconciliation Act of 1996 (P.L 104-193), enacted 22 August 1996.
32. L. Ku and T.A. Coughlin, How the Welfare Reform Law Affects Medicaid, New Federalism and Options for States, no. A-5 (Washington: Urban Institute Press, 1998).
33. GAO, Medicaid: Sustainability of Low 1996 Spending Growth Is Uncertain.
34. To constrain growth in spending for physician services, Medicare implemented volume performance standards (VPS) in 1990 and incorporated them into the Medicare physician fee schedule in 1992. The VPS rewards or penalizes physicians and other professionals for changes in aggregate per capita utilization that occurred two years earlier. Since volume in 1994 and 1995 grew faster than specified targets, there was a penalty in the 1996 and 1997 payment rates. Since 1986 growth in the elderly population age sixty-five and older has been decelerating. Annual growth in 1997 slowed by two-tenths of a percentage point over 1996 growth. However, that trend is expected to reverse by 2000.
35. The drop in freestanding home health agency revenue in 1997 is in sharp contrast to the 20 percent growth in Medicare funding for care provided by hospital-based home health care agencies in 1997.
36. Congressional Budget Office, Reducing the Deficit: Spending and Revenue Options (Washington: U.S. GPO, February 1995).
37. S. Smith et al., "The Next Ten Years Of Health Spending: What Does the Future Hold?" Health Affairs (September/October 1998): 128-140.
38. Mercer/Foster Higgins, National Survey of Emplover-Sponsored Health Plans, 1997 (New York: William M. Mercer, 1997).
39. Foster Higgins, National Survey of Employer-Sponsored Health Plans, Report/1996 (New York: Foster Higgins, 1996); and Center for Studying Health System Change, "The Trajectory of Managed Care," Issue Brief, no. 9 (May 1997): 1-4.
40. Foster Higgins, National Survey of Employer-Sponsored Health Plans, Report/1996 (New York: Foster Higgins, 1996); and Center for Studying Health System Change, "The Trajectory of Managed Care," Issue Brief, no. 9 (May 1997): 1-4.
41. The difference between premiums earned and benefits incurred is a measure of net cost, which includes insurers' costs of paying bills, advertising, sales commissions, and other administrative costs; net additions to reserves; rate credits and dividends; premium taxes; and profits or losses.
42. Board of Trustees, Federal Hospital Insurance Trust Fund, 1998 Annual Report of the Board of Trustees of the Federal Hospital Insurance Trust Fund (Baltimore: HCFA, 28 April 1998).
43. Out-of-pocket spending excludes premiums paid by employees or individuals. These are counted as part of private health insurance.
44. KPMG Peat Marwick, Health Benefits in 1997 (Newark, N.J.: KPMG Peat Marwick, 1997), and earlier editions.
45. Ibid.
46. Smith et al., "The Next Ten Years."