Health care costs rise, but at slower pace in 2002

? Health care spending growth slowed for the first time in five years in 2002 as patients took on many of the costs previously covered by managed care, a new study found.

Spending on privately-insured Americans jumped 9.6 percent in 2002. That’s nearly four times faster than overall economic growth, but down slightly from the 10 percent jump in 2001, according to the Center for Studying Health System Change, a Washington, D.C.-based policy research organization.

Paul Ginsburg, co-author of the study and president of the center, said he wasn’t surprised that growth moderated because the 10 percent surge in 2001 reflected a trend toward loosening managed care restrictions that had contained costs.

“The growth in 2001 was extreme because of the transition away from managed care. But we are a year past that and the change in the system,” Ginsburg said.

As managed care loosened its grip on the health care system, hospitals were able to extract larger payments from health insurers.

“Insurers are not in the same position they were in the early 90s,” said Caroline Steinberg, vice president of the American Hospital Assn., a Washington, D.C.-based trade group.

For the second year in a row, hospital costs were the biggest drivers of growth. A combination of hospital inpatient and outpatient care accounted for 51 percent of the growth in spending, the same amount as in 2001.

Overall use of hospital inpatient and outpatient services slowed to 5.7 percent last year, after climbing 8 percent in 2001. But hospital prices increased 5.1 percent in 2002, the largest one-year jump since at least 1994.