The study, published in the November/December issue of Health Affairs, reveals that a third of the drug-related cost increase came from higher drug prices, while the remaining two-thirds was due to new drugs, and the use of existing drugs, according to BNA’s Pension and Benefits Daily.
The study reveals that health care costs rose 6.6% overall last year, up from an average increase of 2.4% per year from 1993 to 1997.
Hospital costs accounted for just 3% of the increase, while physician services spending accounted for 32% and spending for hospital outpatient services accounted for 2%.
Health insurance premiums increased 8.3% in 2000, compared with average annual increases of just 2% between 1994 and 1998. However, different plan types experienced different growth rates:
- Health maintenance organizations (HMO) premiums increased 9.4% for fully insured plans, 4.5% for self-insured plans
- Preferred provider organizations premiums increased 10.9% among fully insured plans, 7.4% among self-insured plans
- The percentage of employees enrolled in self-insured plans increased from 48% last year to 51% in 2000
Health Affairs is a bimonthly health policy journal published by Project Hope.