A new government report affirms that payers and providers are tightening the reins on healthcare spending.
A HCFA report released last week indicates U.S. healthcare spending defied forecasts that it would exceed $1 trillion in 1994. In fact, healthcare spending fell $11.5 billion short of that mark even in 1995, according to HCFA.
The $988.5 billion spent on healthcare in 1995 was a 5.5% increase over the $937.1 billion spent in 1994.
The report from HCFA actuaries said healthcare spending growth between 1993 and 1995 was the smallest in 30 years, reflecting slow growth in private health insurance expenditures and increased managed-care enrollment. Privately financed healthcare spending went up just 2.9% from 1994 to 1995.
Despite the healthcare system's success in holding down cost growth, the same isn't necessarily true in public programs, where costs increased 8.7% from 1994 to 1995.
That trend may put new pressure on Washington lawmakers to agree to Medicare and Medicaid reforms that will restrain spending growth.
Long-term-care services registered some of the fastest growth in 1995. Spending on home-care services rose 8.6% in 1995 to $28.6 billion, while spending on nursing-home care grew 7.5% to $77.9 billion.
The growth in spending on hospital care from 1994 to 1995 was the slowest of any sector. Its annual increase of just 4.5% was down from as high as 10.1% from 1990 to 1991. Hospital spending reached $350.1 billion in 1995.
Hospital spending also remains by far the largest component of national healthcare spending. Its slow growth, however, coupled with faster growth in such sectors as home care, nursing-home care and other professional services, pushed its share of total spending below 40% for the first time in about 30 years.