Expensive medical technologies and steep hospital fees helped fuel a 10 percent jump in health care spending in 2001, according to a report in the Sept. 25 issue of the journal Health Affairs.
Spending by consumers and insurance companies on outpatient hospital care outpaced expenditures for prescription drugs for the first time in a decade in 2001, according to the report issued on Wednesday.
“People are getting more and more tests and treatments as managed care plans abandon tight restrictions,” said Paul Ginsburg, the report’s author and president of the Center for Studying Health System Change, a nonpartisan think tank.
“Higher hospital prices are playing a role as well,” he said.
In 2001, spending on outpatient hospital visits and procedures surged about 16.3 percent, rising faster than prices for prescription drugs, which grew about 13.8 percent, the report said.
Managed care companies have eased tight limits on care adopted in the 1990s, such as requirements that a primary care physician refer patients to specialists.
That change probably helped increase hospital costs, and consumers will bear the added burden, Ginsburg said.
“Consumers are going to be feeling pain no matter what,” Ginsburg said in a telephone interview. “There is no doubt that these very high rates of cost increases are going to be passed through to them.”
Last year was the second year in a row that spending on prescription drugs slowed, which researchers attributed to the prevalence of less expensive generic drugs and a dearth of Viagra-like blockbuster drugs from drug makers.
Early data on trends for 2002 suggest overall health spending may be abating, growing at just about 8.8 percent for the first six months of this year, the report said.
That reduction in spending is likely a result of employers passing off costs to employees, according to the study.
Making consumers aware of the price tag for their medical costs is likely to make a dent in overall health inflation, Ginsburg said.
It’s not very popular, he said, but studies show it can save money.