CMS reports decrease in rate of health care spending growth

The rate of growth of health care spending — both government and private — decreased in 2003, marking the first time in 7 years that the rate of spending growth has gone down, according to the Centers for Medicare and Medicaid Services. The actual amount of spending on health care went up 7.7% in 2003, but this was a smaller increase than the 9.3% rise in 2002, analysts said.

The decreased growth rate was caused by a number of factors, including government actions and changes in drug prices, the CMS said in a press release. Medicaid spending decreased, and provisions for supplemental funding to Medicare providers expired in 2003, the CMS release noted.

Spending growth in the private health care sector decreased only slightly in 2003, the report said. During 2003, private health care spending grew 8.6%, compared to a 9% growth rate in 2002. Out-of-pocket spending increased 7.6% in 2003, compared with 6% in 2002.

The growth of spending on prescription drugs decreased in 2003 as well. Among the reasons cited were that fewer prescriptions were dispensed in 2003 and the use of tiered copayment plans was expanded, according to the CMS.

Spending for physician services increased 8.5% in 2003, up only slightly from an increase of 8.2% in 2002, the CMS said.

“This is good news for the public and our health care system and is the result of changes designed to slow down the growth in spending,” said Health and Human Services Secretary Tommy G. Thompson, quoted in the CMS press release.