Shift Noted in U.S. Healthcare Spending

A federal study shows the 1 percent of U.S. residents spending the most on medical care saw a 4 percent drop in their share of U.S. healthcare spending.

The Department of Health and Human Service says the shift from 28 percent to 24 percent between 1996 and 2003 was partly due to rapid growth in prescription drug spending and slower growth in spending for hospital inpatient care.

The department’s Agency for Healthcare Research and Quality in Health Affairs said between 1996 and 2003, inflation adjusted spending on prescription medicines increased by 125 percent, while spending for inpatient hospital care grew by only 11 percent. As a result, spending for prescription medicine accounted for 20 percent of overall medical care expenditures in 2003, up from 12 percent in 1996.

During the same period, the share of spending for inpatient hospital care dropped from 39 percent to 34 percent.

According to the researchers, Medicare’s Part D drug benefit will probably increase prescription drug spending. However, they said the impact of Part D on the concentration of healthcare spending is not yet clear.

The research appears in the February issue of the journal Health Affairs.