Even with the percentage of uninsured Americans at its highest since 1998, a new report issued last week warned that the number of Americans without health coverage could grow as healthcare costs, which plateaued this year after a brief slowdown, may start creeping up again soon.
The report from the Center for Studying Health System Change and the Employee Benefit Research Institute, both Washington think tanks, found that healthcare costs per privately insured American grew 7.5% during the first half of 2004, almost the same rate as in 2003. That is in contrast to what happened during the previous two years when healthcare spending slowed after peaking at a 10% growth rate during 2001. Healthcare spending in the private sector makes up more than half of all healthcare spending in the U.S.
This trend, along with the fact that the 7.5% figure outpaced the 5.9% growth rate of the overall economy, augurs poorly for the prospects of bringing down the number of uninsured any time soon, said Paul Ginsburg, president of the center and co-author of the report. "(Healthcare costs) are pricing more and more people out of the insurance marketplace," he said.
In 2003, the latest figures available from the Census Bureau, nearly 45 million Americans were uninsured, up from 43.6 million the year before and 41.2 million in 2001. Some 15.6% of Americans were uninsured last year, the highest figure since 1998, when the uninsured rate was 16.3%.
Last week's news is particularly troubling because the implication is that healthcare spending may be on the rise again without a comprehensive national strategy in place to reduce spending, Ginsburg said. Despite the push toward consumer-driven healthcare and a strategy to shift costs from employers to consumers, the evidence to date indicates that such strategies are not having much effect on holding healthcare spending down.
"I would say we don't have a powerful force that would be expected to drive down costs further," he said. And even if the growth rate of healthcare spending slows down again, the cost of employer-sponsored insurance could continue to outpace the growth in workers' wages, forcing more Americans onto the uninsured rolls, the report said.
Much of the blame for increases in healthcare spending over the past few years has been placed on spending on hospital services. According to the report, spending on both inpatient and outpatient services has held fairly steady, rising 8.6% for the first half of this year, compared with an 8.7% increase during the second half of last year and a 9.1% jump during the first half of last year. Spending on inpatient services rose 5.1% for the first half of this year, compared with 6% and 6.4% increases during the first and second halves of last year, respectively. Spending on outpatient services rose 11.4%, compared with an 11.7% and 10.5% increase during the first and second halves of last year.
Hospital prices also continued to rise sharply, increasing by 7.7% during the first six months of 2004. Authors of the report attributed that to a 4.5% increase in wage growth to hospital workers "driven by a persistent worker shortage, particularly for nurses," and a sharp decline in profit margins for Medicare patients that has forced hospitals to shift costs to private payers.