Tracking Health Care Costs:

What’s New in 1998?

September/October 1998
Health Affairs , vol.17, no.5 (September/October 1998): 141-146
Paul B. Ginsburg, Jon R. Gabel

espite proclamations in the media, health care costs are not rising as much as predicted. The authors reviewed cost trends for private insurance premiums (an increase of only 3.3 percent in 1998), provider revenues (a striking contrast between high rates of increase for drugs and low rates for hospital and physician spending) and payrolls in health services establishments (a sharp decline in the early 1990s with only modest increases since then), and found only a small upswing in the rate of cost increases. Consumers are receiving substantial benefits from the low cost increases: slow growth in employee contributions to insurance premiums, and 9 percent lower out-of-pocket spending in 1995 than in 1990. These consumer spending trends may be attributable to rapid shifts from conventional coverage to managed care.

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