Executive Summary

HEALTH CARE COSTS GREW 10.3% IN 1983, THE LOWEST ANNUAL increase in a decade, according to new Health Care Financing Administration statistics. Overall health costs rose 12.5% in 1982, and 15.3% in 1980, the highest single-year inflation rate. Spending on all health services totaled $355 bil. in 1983, or about $1,459 for every U.S. citizen, HCFA said. Releasing the figures Oct. 10, HHS Secty. Heckler ascribed the slowing health inflation rate to lower general inflation, business and provider "cost-effective initiatives," and "reforms" in govt. programs. Hospital spending rose 9.1% in 1983, to $147 bil., HCFA reported. Hospital inflation was 14.9% the year before. Spending for physician services amounted to $69 bil. in 1983, an 11.7% increase compared to 12.8% the previous year. In Medicare and Medicaid, combined state and federal outlays totaled $91 bill., versus $83 bil. in 1982. The two programs paid $54 bil. for hospital care, up from $48 bil. in 1982, accounting for more than a third of all hospital payments and 29% of all health expenditures, HCFA said. Patients paid out-of-pocket for 27% of all health costs during 1983. HCFA plans to publish the estimates in the winter issue of Health Care Financing Review. Copies will be available in December for $4.75, from Superintendent of Documents, Govt. Printing Office, Washington, D.C. 20402.