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America's Medical Tab Is Growing Faster Than Ever...

Economic Trends


As the economy struggles to quicken the pace of recovery, the nation's medical bill is growing inexorably larger. According to estimates by the Health Care Financing Administration, health care expenditures increased from 9.3% of gross domestic product in 1980 to 12.4% in 1990, and they almost certainly top-ped 13% in 1991.

Recent projections by the hcfa indicate that the nation's health outlays will reach $1.6 trillion by the year 2000, up from $666.2 billion in 1990. What's more, the growth rate of real per capita health spending, which rose 50% faster than per capita gdp in the late 1980s, is projected to quicken in the 1990s, even though overall economic growth is expected to be slower. The upshot: Health expenditures could well account for 17% of gdp by the year 2000, or about one-sixth of national output.

By international standards, America's record in controlling medical costs over the past decade has been dismal. In 1980, total health costs as a percent of gdp were slightly more than two percentage points higher in the U.S. than the average for 24 members of the Organization for Economic Cooperation & Development: 9.3% vs. 7.1%. But by 1990, the gap had widened to nearly five percentage points: 12.4% vs. 7.6%.

Indeed, in such nations as Japan, Switzerland, Germany, and Sweden, health spending as a share of national output was the either the same in 1990 as in 1980 or had actually declined.GENE KORETZ

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