Tracking Health Care Costs: Declining Growth Trend Pauses in 2004

June 21, 2005
Health Affairs, Web Exclusive (June 21, 2005)
Bradley C. Strunk, Paul B. Ginsburg, John P. Cookson

Health care spending increased 8.2 percent in 2004. This was virtually unchanged from 2003, which suggests that health care cost trends have stabilized. Hospital spending grew 10.1 percent in 2004, also virtually unchanged from 2003, reflecting a small increase in the hospital utilization trend and a small decline in hospital price inflation. Meanwhile, growth in prescription drug spending continued to fall as a result of slower growth in prices. Growth in health insurance premiums slowed again in 2005, likely reflecting earlier years’ slowing in cost trends and signaling that a turn in the insurance underwriting cycle might be under way.

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