2002 SPENDING Growth slowed down for health-care costs

NEW YORK (AP) -- Health-care spending growth slowed for the first time in five years in 2002 as patients took on many of the costs previously covered by managed care, a new study found.
Spending on privately insured Americans jumped 9.6 percent in 2002. That's nearly four times faster than overall economic growth, but still down slightly from the 10 percent jump in 2001, according to the Center for Studying Health System Change, a Washington, D.C.-based policy research organization.
Paul Ginsburg, co-author of the study and president of the center, said he wasn't surprised that growth moderated because the 10 percent surge in 2001 reflected a trend toward loosening managed care restrictions that had contained costs.
"The growth in 2001 was extreme because of the transition away from managed care. But we are a year past that and the change in the system," said Ginsburg.
As managed care loosened its grip on the health-care system, hospitals were able to extract larger payments from health insurers.
"Insurers are not in the same position they were in the early 90s," said Caroline Steinberg, vice president of the American Hospital Association, a Washington, D.C.-based trade group. "Patients want a lot more choice, so insurers have lost their leverage."
For the second year in a row, hospital costs were the biggest drivers of growth. A combination of hospital inpatient and outpatient care accounted for 51 percent of the growth in spending, the same amount as in 2001.
Spending on inpatient hospital care increased 6.8 percent in 2002, accounting for 14 percent of total spending growth.