Health care spending growth slowing

The phenomenal growth in national health care spending that characterized much of the 1980s and early 1990s has slowed to its lowest level in 37 years of record keeping, according to a report by the U.S. Department of Health and Human Services (HHS).

In 1996, the latest year for which figures are available, national spending on health care increased a modest 4.4% compared with 5.5% in 1995 — a far cry from the double-digit and near double-digit spending growth rates experienced a decade ago, the January report states. (See chart, p. 44.)

Managed care has succeeded in cutting costs and creating efficiencies in the way health care is delivered, the numbers show, squeezing out excess spending and contributing to the slower growth rate.

Public spending on health care also has put on the brakes; Medicare spending increased only 8.6% in 1996, down from 10.6% in 1995.

"This report shows significant national progress in slowing the growth of health care spending. The new balanced budget will help control spending even more, and in the right way so this trend can continue," HHS Secretary Donna E. Shalala said in a statement.