Prescription meds changing health care spending
Newswise — The 1 percent of Americans who spend the
most on medical care experienced a 4 percent drop in
their share of the nation's overall health care
spending from 1996 to 2003 from 28 percent to 24
percent, according to a new study by HHS’ Agency for
Healthcare Research and Quality in Health Affairs.
In general, the concentration of health care
spending in the United States has shifted partly
because of rapid growth in prescription drug
spending and slower growth in spending for hospital
inpatient care. Between 1996 and 2003, inflation
adjusted spending on prescription medicines
increased by 125 percent, while spending for
inpatient hospital care grew by only 11 percent.
As a result, spending for prescription medicine
accounted for 20 percent of overall medical care
expenditures in 2003, up from 12 percent in 1996.
During the same period, the share of spending for
inpatient hospital care dropped from 39 percent to
The patients in the top spending brackets tended to
have chronic illnesses, such as heart disease and
cancer, who often require costly hospital inpatient
care. The declines were apparent for people of all
ages and with both public and private insurance.
Previous studies showed that their share of medical
spending remained relatively stable for the three
decades prior to 1996.
According to the authors, while encouraging patients
to be sensitive to drug prices, such as through
health plan tiered formularies or high deductibles,
may increase the potential for cost savings,
Medicare’s Part D drug benefit will probably
increase prescription drug spending. However, the
impact of Part D on the concentration of health care
spending is not clear at this point