Health spending growth slows in 2003

Health Affairs

Volumn 24, Issue 1, 2005, Pages 185-194

  Smith, Cynthia ^a   Cowan, Cathy ^a   Sensenig, Art ^a   Catlin, Aaron ^a  

^a National Health Statistics Group   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

FINANCIAL MANAGEMENT; HEALTH CARE COST; HEALTH INSURANCE; HEALTH PROGRAM; HUMAN; MEDICAID; REVIEW; UNITED STATES;

DELIVERY OF HEALTH CARE; FINANCING, GOVERNMENT; FINANCING, PERSONAL; HEALTH EXPENDITURES; INSURANCE, HEALTH; MEDICAID; UNITED STATES;

EID: 12844253825     PISSN: 02782715     EISSN: None     Source Type: Journal    
DOI: 10.1377/hlthaff.24.1.185     Document Type: Review

References (28)

1. Estimates of total U.S. health spending are measured annually in the Centers for Medicare and Medicaid Services National Health Accounts. Health expenditures are based on census data and sample surveys of health services and products that are reconciled with payments made by public and private sources. Estimates are presented in a matrix identifying the type of service or product and the end payers and are generally reported in nominal terms. The Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003 does not affect these estimates.
2. Deflated by the GDP implicit price index.
3. There are many criticisms of commonly used price measures, including their general inability to measure shifts in care or to account for improvements in quality. There have also been technical problems in measuring different medical components of the Consumer Price Index (CPI) and Producer Price Index (PPI). The CMS annually constructs a personal health care deflator that uses the best available data for each service component.
4. National Association of State Budget Officers, "The Fiscal Survey of States: April 2004," June 2004, www.nasbo.org/Publications/fiscsurv/2004/ fsapril2004.pdf (17 November 2004).
5. Upper payment limit (UPL) programs allow states to reimburse hospitals and nursing homes owned by county and municipal governments at "enhanced" rates. Federal matching funds on state Medicaid spending for nursing homes are collected by the states; nursing homes then remand a portion of the UPL funds back to the state governments, which then may use these funds for other uses. Disproportionate-share hospital (DSH) payments work in a similar fashion by providing additional payments to state and county hospitals serving a disproportionate share of low-income people.
6. U.S. Government Accountability Office, Medicaid: Improved Federal Oversight of State Financing Schemes Is Needed, Pub. no. GAO-04-228 (Washington: GAO, 2004).
7. CMS Press Release, "Medicare: Hospital Inpatient Prospective Payment Systems and 2004 FY Rates, Final Rule," Federal Register (1 August 2003): 45345-45672.
8. J. Grossman and P. Ginsburg, "As the Health Insurance Underwriting Cycle Turns: What Next?" Health Affairs 24, no. 6 (2004): 91-102.
9. Bureau of Labor Statistics, "Employer Costs for Employee Compensation," data.bls.gov/cgi-bin/surveymost?cc, selecting Civilian, All Workers, Health Insurance (28 September 2004).
10. Henry J. Kaiser Family Foundation and Health Research and Educational Trust, Employer Health Benefits: 2003 Annual Survey (Menlo Park, Calif.: Kaiser/HRET, 2003), 3.
11. Ibid.; and R. Lieber, "Healthy Trend - New Way to Curb Medical Costs," Wall Street Journal, 23 June 2004.
12. Ibid.; and R. Lieber, "Healthy Trend - New Way to Curb Medical Costs," Wall Street Journal, 23 June 2004.
13. U.S. Bureau of the Census, Income, Poverty, and Health Insurance Coverage in the United States: 2003, Current Population Reports no. P60-226, August 2004, www.census.gov/prod/2004pubs/p60-226 .pdf (22 September 2004).
14. For a description of what services are covered in each category, see CMS, "Category Definitions: National Health Expenditures," 17 September 2004, cms.hhs.gov/statistics/nhe/quick-reference (12 October 2004).
15. Bureau of Labor Statistics, Current Employment Statistics survey, data.bls.gov/labjava/outside.jsp?survey=ce (17 November 2004). Authors multiplied "all employees" by "average weekly hours" and "average hourly earnings" to derive "total payroll."
16. CMS, "Medicare Physician Fee Schedule for 2003," Press Release, 27 February 2003, cms.hhs .gov/media/press/release.asp?Counter=712 (18 October 2004).
17. Services provided through home and community-based waivers are captured in other personal health care expenditures.
18. CMS, "CMS Health Care Industry Market Update, Nursing Facilities" (Baltimore: CMS, May 2003), 9.
19. Medicare Payment Advisory Commission, Report to the Congress: Medicare Payment Policy (Washington: MedPAC, March 2004), 114.
20. BLS, Current Employment Statistics Survey data calculated for home health services.
21. Prescription data from IMS Health, National Prescription Audit Survey, 2003. Population data are from the Bureau of the Census.
22. The percentage-point decline measures the loss in sales in the prescription antihistamine class between 2002 and 2003, including the impact on sales of other prescription antihistamines that were frequently moved to higher tiers. All antihistamine prescription sales are assumed to have occurred in the retail market. IMS Health, "Leading Twenty Therapeutic Classes by U.S. Sales," February 2004, imshealth.com/ims/portal/front/articleC/0,2777, 6599_42720942_44304299, 00.html (18 October 2004).
23. IMS Health, "Pricing and Reimbursement Review, 2003" (Cambridge, Mass.: IMS, June 2004). National Health Accounts estimates of prescription drug spending measure retail sales of U.S. pharmacies but not purchases by U.S. citizens through foreign pharmacies.
24. Verispan, "Verispan Reports: OTC Alternatives Hurting Prescription Antihistamines," Press Release (Yardley, Pa.: Verispan, July 2003).
25. Kaiser/HRET, Employer Health Benefits: 2003 Annual Survey, 114-117. The first tier typically entails the lowest copayment for a generic drug, a higher copayment for preferred brand-name or other generic drugs, and the highest copayment for nonpreferred brand-name drugs.
26. M. Johnsen, "Generic Substitution Efforts May Yield Diminishing Returns," Drug Store News (February 2004): 44-45.
27. IMS Health, "Pricing and Reimbursement Review, 2003." Figures cited include generics and brand-name generics.
28. L. Achman and M. Gold, "Trends in Medicare+ Choice Benefits and Premiums" (New York: Commonwealth Fund, April 2003).