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Health Tracking

TRENDS

Health Spending Projections For 2001–2011: The Latest Outlook

Abstract

 
This paper describes the most recent ten-year projections of national health spending. The projections, produced annually, are based on econometric and actuarial models of the health sector. Our current outlook includes a sharper near-term increase in the health sector’s share of gross domestic product (GDP), which reaches 16.8 percent by 2010, compared with the 15.9 percent projected last year. This difference largely reflects legislation-driven increases in public spending growth combined with a weaker economic outlook. Recent acceleration in private-sector health spending is projected to peak in 2002.

View larger version (10K): [in this window] [in a new window]   EXHIBIT 3 National Health Expenditures As A Share Of Gross Domestic Product (GDP), 1985–2011

In 2001, higher projected Medicare and Medicaid spending growth more than offsets slower private growth, producing a faster rate of change in total national health spending growth. Since GDP growth in 2001 is projected to be much weaker than previously expected, we anticipate that 2001 national health expenditures will reach 14 percent of GDP, compared with our earlier projection of 13.4 percent. This represents a sharp increase following an extended period of near stability; the share has hovered just above 13 percent since 1992.

The national health spending projections are generated within a framework that incorporates actuarial, econometric, and judgmental inputs. "Current-law" projections for Medicare are based on the 2001 Medicare Trustees Reports; Medicaid spending projections are consistent with assumptions in those reports.² Projections for private health spending are based on an econometric model.³ Both the private and public projections use the economic and demographic assumptions from the 2001 Trustees Reports updated to reflect the latest historical data.⁴

Our projections are conditional on assumptions about macroeconomic conditions and health-sector parameters, with the degree of uncertainty increasing with the projection horizon. We qualify our projections, then, subject to these inherent uncertainties and how they may affect our results. For example, new medical technologies or new variations of insurance coverage may ignite or dampen spending growth. Also, the events of 11 September 2001 are expected to produce effects of uncertain magnitude.⁵

Revised Funding Outlook

Top Revised Funding Outlook Public-Sector Spending Private-Sector Spending Revised Medical Services... Conclusions NOTES

 
Health care spending reached $1.3 trillion in 2000, up 6.9 percent from 1999 (Exhibit 4).⁶ This growth was 1.4 percentage points lower than we had projected last year. Lower-than-projected spending growth in the private sector offset higher-than-projected growth in the public sector. Lower-than-anticipated growth in private spending for 2000 was observed in most sectors, but particularly in nursing homes and home health care.

Upward revisions to spending growth for 2001 are the result of largely one-time spending increases for Medicare as a result of recent legislation and faster Medicaid growth, which reflects anticipated increases in utilization and enrollment caused by a slowing economy. For 2002 and 2003, public-sector spending growth decelerates and is outpaced by rising private health insurance premiums. As a result, the private share of health spending is projected to increase to 55.2 percent by 2003.

In the latter part of the projection, private health spending growth is expected to decelerate as income growth slows, and its share of expenditures is expected to fall to 53.3 percent by 2011. This is roughly in line with the gradual downward trend in the private share observed since the implementation of Medicare and Medicaid.

Public-Sector Spending

Top Revised Funding Outlook Public-Sector Spending Private-Sector Spending Revised Medical Services... Conclusions NOTES

 
Public health care spending is expected to accelerate more sharply in 2001 than previously projected, growing by 10.4 percent compared with 7.0 percent in 2000. This projection for 2001 represents a 3.3-percentage-point increase over our previous forecast, reflecting (in large part) Medicare legislation enacted after we made our projections last year. Public health care spending growth is expected to moderate greatly for 2002 and the next several years. This is attributable in part to the expiration of Medicare funding provisions associated with this recent legislation. For 2002–2011, public spending is anticipated to grow at an average annual rate of 7.3 percent. This rate of increase is below the 9 percent average growth during 1990–1997 but faster than the 4.5 percent average growth during 1998–1999.

Medicare and Medicaid. The revised projections for Medicare reflect provisions introduced under BIPA, which increased payments to providers and added new benefits. For calendar year 2001 Medicare spending is projected to increase 9.5 percent—2.5 percentage points faster than projected last year. The September 2001 Treasury statements indicate that Medicare "cash" benefits for fiscal year 2001 grew 10.1 percent.⁷ BIPA increased funding for most Medicare payment systems, resulting in, for example, higher payment updates for hospital inpatient services, additional funds for indirect medical education and for specific services provided by skilled nursing facilities, and lower reductions in disproportionate-share hospital (DSH) payments. In addition, the 2001 Medicare Trustees Reports include a larger hospital case-mix assumption based on a recommendation by the Technical Review Panel on Medicare Trustees Reports, which further increased projected Medicare spending.⁸ By 2003, based on current law, Medicare spending growth is expected to fall 5.5 percentage points to 4 percent—a deceleration based largely on the expiration of many of the additional funding provisions under the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act (BBRA) of 1999 and BIPA, and the projected economic slowdown that particularly affects physician reimbursements because of the sustainable growth rate system.⁹

Medicaid spending is also projected to accelerate sharply in 2001, growing at 11.5 percent compared with 8.6 percent in 2000. Recent "cash" data from the Treasury statement for FY 2001 show an increase of 10.8 percent.¹⁰ Again, this reflects in part new legislation, as BIPA increased the limits on the amount of federal matching funds that states could receive for DSH payment adjustments. The acceleration is caused to a lesser extent by increased Medicaid enrollment in 2001–2003 as a result of slower economic growth. Like the pattern observed for Medicare spending growth after 2001, Medicaid spending growth is expected to moderate.

Government public health. We project that public health spending growth will accelerate for 2001 and 2002 at 11.8 percent and 16.0 percent, respectively, compared with 8.3 percent for 2000. This growth is much faster than projected last year, in large part as a result of funding increases to upgrade the public health system to defend against bio-terrorist attacks. Federal public health spending is projected to increase 15.9 percent for 2001 and 34.2 percent for 2002, mostly as a result of an expected increase in the FY 2002 budget for the Centers for Disease Control and Prevention (CDC).¹¹

Although we are also projecting significant state and local government public health spending increases—11.3 percent and 13.6 percent for 2001 and 2002, respectively—these estimates are more uncertain. As a result of stalled revenue growth associated with the economic downturn, some states are simply shifting resources from other public health activities to biodefense. For 2003–2011, growth in government public health spending is expected to moderate. However, spending on biodefense will continue to result in slightly higher growth rates than otherwise would have been projected. Higher spending growth reflects anticipated maintenance and improvement costs associated with systems to be put in place in 2001 and 2002.

Private-Sector Spending

Top Revised Funding Outlook Public-Sector Spending Private-Sector Spending Revised Medical Services... Conclusions NOTES

 
Projections for private health spending growth in the near term are slightly lower than last year’s projections, reflecting a weaker macroeconomic outlook. Nevertheless, we expect that private health spending growth will accelerate to 8.9 percent and 9.4 percent for 2001 and 2002, respectively, compared with 6.9 percent for 2000. This acceleration reflects the lagged effect of recent rising household incomes, a shift to less restrictive forms of managed care, rising price inflation resulting from the weaker influence of selective contracting, and provider consolidation. In nominal terms, this growth is below the growth that prevailed during the 1980s and early 1990s, periods characterized by high overall and medical price inflation. However, in real terms, private health spending growth in 2001 and 2002 is projected to be similar to growth during those earlier years.

After 2002, growth is projected to gradually slow to 5.9 percent by 2011. This deceleration can be primarily attributed to slower projected per capita real income growth, a move toward more restrictive forms of managed care, a rise in the uninsured population, and an increase in the use of consumer cost sharing. In real terms, growth is expected to average 3.5 percent per year in the 2003–2011 period, compared with 6.1 percent for 1980–1992 period and 3 percent for 1993–1998.

The current recession coupled with rising health insurance premiums has changed the operating environment for employers, whose budgets have become increasingly squeezed. In response, employers are searching for new ways to control costs, and it is anticipated that they will try to pass more of the health care costs on to their employees. This could be in the form of higher premiums, copayments, or deductibles. These factors are expected to constrain private health spending growth later in the projection period. Higher premiums, for example, would likely induce more people to forgo health coverage; higher copayment rates presumably would lessen the demand for services. A recent survey of 200 employers reported that nearly three-fourths consider reducing benefits or raising copayments or both as "likely" or "somewhat likely" in the coming twelve months.¹²

Private health insurance and out-of-pocket spending. Private health insurance premiums grew 8.4 percent in 2000—the first time growth had exceeded 8 percent since 1993 (Exhibit 5). Premium growth is expected to be 9.6 percent for 2001 and 10.4 percent for 2002, an accelerating pattern that is consistent with recent surveys of employer-sponsored health benefits.¹³ Two factors are causing this acceleration: higher medical costs and the underwriting cycle.¹⁴

View larger version (12K): [in this window] [in a new window]   EXHIBIT 5 Growth In Private Health Insurance Premiums, 1985–2011

The year 2000 marked the second consecutive year in which private health insurance premiums grew faster than private health insurance benefits (8.4 percent versus 7.4 percent, respectively), which reflects rising health plan profitability associated with the current phase of the underwriting cycle. Although the projected economic downturn is expected to sharply reduce the growth in the privately insured population in 2001 relative to 2000, we expect premium growth to exceed health care cost growth through 2002. During 2003–2006 we anticipate that premium growth will slacken, as a result of decelerating health costs and the projected reversal of the underwriting cycle. After 2006 we expect premium growth to remain relatively stable at approximately 6.0–6.5 percent annually, averaging growth similar to that for private health insurance benefits.

Consumers’ out-of-pocket costs are projected to accelerate sharply as well, as employers pass along a greater share of health cost increases to employees. However, even with this acceleration, the rate of increase is expected to remain slightly below that for private health insurance premiums. The out-of-pocket share of private personal health care (PHC) spending is expected to decline slightly over the projection period, from 30.3 percent for 2001 to 29.4 percent for 2011. This pace of decline is much slower than the 5.2-percentage-point decline from 1991 through 2000. The sharp decline in 1991–2000 was partially attributable to the broad shift from indemnity plans with higher cost-sharing requirements toward managed care plans with lower cost sharing. This effect is nearly absent in the projection period. Also, the rising trend in the uninsured share of the population should resume in 2002 and continue throughout the projection period, contributing to faster growth in out-of-pocket spending.

Revised Medical Services Spending Outlook

Top Revised Funding Outlook Public-Sector Spending Private-Sector Spending Revised Medical Services... Conclusions NOTES

 
The makeup of the medical services projection is again similar to last year’s projection: Prescription drug spending as a share of PHC spending is projected to rise, while the hospital and physician shares (which together accounted for 61.8 percent of PHC spending in 2000) are expected to slowly decline. There are, however, a few noteworthy differences with this year’s projection. First, hospital spending growth is projected to accelerate more sharply than projected last year, as recent data suggest that costs and utilization are rising faster than expected. Second, the deceleration in drug spending growth occurred in 2000, a year earlier than we anticipated, and is now expected to be more pronounced in the near term as the economy slows. Finally, BIPA provisions dramatically added to projected Medicare spending for nursing home care in 2001, and the expiration of some of these provisions will cause a sharper projected dropoff in nursing home spending growth in 2003.

Hospitals. We now project an increase in hospital spending of 8.3 percent for 2001, up from 5.1 percent for 2000 and 3.4 percent for 1999. By comparison, last year we projected 6.5 percent growth for 2001 (Exhibit 6). This increase reflects sharp upturns in estimated growth in Medicare spending in 2001 and in private spending through 2002.

View larger version (11K): [in this window] [in a new window]   EXHIBIT 6 Percent Change In Hospital Spending, 1985–2011

Despite a recent increase in utilization, the hospital sector continues to carry substantial excess capacity.¹⁵ Also, technological change can be expected to continue to support a shift toward outpatient care. Therefore, as in last year’s projection, we expect that hospital spending growth will continue to be outpaced by growth in other health sectors and that its share of PHC spending will continue to decline, reaching 32 percent in 2011. However, this year’s projection exhibits faster growth than last year’s, as hospitals are experiencing a combination of sharply rising costs, increased negotiating leverage with health plans on prices, and more demand for services.

Data on average hourly earnings for non-supervisory hospital workers show a sharp acceleration in 2001, increasing 5.6 percent year-over-year through October, from an increase of 3.2 percent for 2000.¹⁶ This is the highest rate of increase since 1991 and is believed to reflect in part hospitals’ response to labor shortages. The Producer Price Index for hospital services grew 1.8 percent for 1999 and then 2.6 percent for 2000, with a further modest acceleration to 2.8 percent for November 2001 from the same period a year ago.¹⁷ However, we project the rate of growth for 2002 to increase to 3.7 percent, as sharp increases in labor compensation are passed through to prices. Based on interviews conducted June 2000–March 2001, the Community Tracking Study of the Center for Studying Health System Change indicates that hospitals are better able to pass cost increases along in the form of higher prices to health plans, as more consumers demand plans that offer broad provider networks.¹⁸

Hospitals are also experiencing an upturn in demand for services, driven in part by the short-term shift away from tightly managed care.¹⁹ American Hospital Association annual survey data indicate a sharp increase in both outpatient and inpatient utilization for 2000.²⁰ While changes made to the survey sample in 2000 render these data somewhat difficult to interpret, accelerating employment and hours are consistent with an increase in the volume of services delivered.²¹ Growth in total hours accelerated sharply for 2001, indicating that growth in utilization and spending is likely to continue to increase from 2000, before moderating beginning in 2002, as both private- and public-sector forces indicate slower growth.

The projected acceleration in Medicare spending growth of 9.8 percent for 2001 (from 4.5 percent for 2000) and the subsequent deceleration for 2002 to 5.6 percent are major contributors to this year’s short-term patterns of growth. Much of this trend is the result of BIPA provisions and their subsequent expiration in 2002 and 2003. Private spending growth also is projected to accelerate, although more gradually than Medicare spending, rising from 5.1 percent for 2000 to 8 percent for 2002.

In the out-years of the forecast, hospital spending growth is projected to slow from 6.2 percent for 2005 to 5.1 percent for 2011. This reflects an upward revision on average of 0.5 percentage points per year relative to last year’s projection, primarily due to faster projected private spending growth. This revision is largely attributable to a change in the expected effects of managed care on hospital spending, as providers exhibit greater leverage in pricing and as the rate of migration of services out of inpatient settings declines.

Prescription drug spending. The two notable features of our prescription drug spending projections are a marked deceleration in the rate of spending growth, falling from 17.3 percent for 2000 to 10.1 percent for 2011, and double-digit growth rates for the entire projection period.²² While this pattern is similar to that projected last year, the deceleration predicted for 2001 actually occurred in 2000, as growth fell from a peak of 19.2 percent in 1999. This slowdown appears to reflect the recent introduction of tiered payment schemes, other forms of increased cost-sharing, and the fact that fewer "block-buster" drugs have been introduced in the past few years compared to the mid-1990s.²³ Still, we project that between 2001 and 2011 drug spending growth will exceed total health spending growth by almost five percentage points per year on average, so that by 2011 prescription drug spending will account for 14.7 percent of total health expenditures, compared with its 2000 level of 9.4 percent.

This projected growth path is the product of several countervailing forces. In our model, growth in real per capita drug spending is a function of current and lagged real income growth, the change in drug prices (relative to overall consumer prices), the rate of growth in spending for direct-to-consumer (DTC) advertising, and the number of new drug introductions.²⁴ As we did last year, we expect a slowing rate of drug spending growth over the projection period as insurers expand incentives to use lower-cost drugs. However, weaker projected disposable income growth is now expected to cause the deceleration in drug spending growth to be slightly faster than previously anticipated.

In addition, growth in DTC advertising is expected to slow sharply during the projection period. This advertising grew at an annual average rate of 47.4 percent during 1995–1999 and is believed to be a major contributor to the recent rapid acceleration in drug spending growth.²⁵ While it is still expected to contribute to drug spending growth throughout the projection period, we anticipate that the rate of growth will slow from these unsustainable recent rates. Recent research has shown that consumption of newer drugs is associated with major improvements in mortality and morbidity and with reductions in nondrug medical spending.²⁶ As we projected last year, we expect the number of new drug introductions and their effect on drug spending growth to rise in the latter half of the projection period. As a result, drug spending will grow faster than any other medical service sector over the entire projection period.

As noted above, these projections are subject to considerable uncertainty. For example, the impact of patent expirations on drug spending growth is unclear for several reasons. First, some manufacturers may obtain new patents or extensions. Second, some physicians and patients may be unwilling to switch to generic versions of newly off-patent drugs. Finally, some manufacturers will likely introduce improved versions of current-generation drugs (for example, with better efficacy and reduced side effects) that are timed with the expiration of patents. Because of this uncertainty, we did not explicitly assume that the impacts of generic competition would be different than in recent years.

Another source of uncertainty is the potential for new drug discoveries made possible by the sequencing of the human genome. The first group of genomics-based drugs is expected to enter efficacy trials over the next few years.²⁷ However, we assume that the largest potential impacts will occur outside the projection period and that such new medicines will have only a modest effect on spending before 2011 (primarily through the projected increase in new drug introductions). This assumption follows since it is unclear exactly how genomic information may affect drug consumption in the future. For example, pharmocogenomics—the study of how genes can affect one’s response to different drugs—may lead to improved patient outcomes. It is also possible that genomic information will increasingly lead to the development of new drugs targeted to very small subpopulations based on shared phenotypic disease profiles. Such a development would limit the potential for recovering research and development costs via mass marketing.²⁸

Nursing home care. Overall, total nursing home spending growth is expected to average 5.5 percent per year during 2001–2011 and to accelerate over the period, mostly as a result of acceleration in private-sector spending. The projected growth for 2001 is similar to that projected last year (7.6 percent now versus 7.5 percent last year) but is masked by different and, to some extent, offsetting factors in the private and public sectors. Private-sector nursing home spending fell 2 percent for 2000 (compared with 7 percent growth projected last year) and is projected to grow just 2 percent for 2001 (compared with 9.2 percent growth projected last year). In the public sector, nursing home spending is expected to increase 11.2 percent for 2001, driven in part by additional funding from BIPA for Medicare payments to skilled nursing facilities. Last year we had projected public spending to grow 6.4 percent for 2001.

After 2001, the growth paths of private and public spending are expected to converge. Private nursing home spending growth accelerates from recent lows, while public nursing home spending decelerates over most of the projection period. The deceleration is attributable in part to slower Medicaid spending growth, as care continues to be shifted out of nursing homes and into other long-term care treatment settings (measured in the health spending accounts under "other personal care"). In addition, Medicare spending growth is projected to drop off greatly, as BBRA and BIPA provisions relating to special payment factors expire in the last quarter of 2002. Neither public nor private growth is greatly affected by the aging of the population during this period. While the baby-boom generation begins to reach Medicare eligibility, its members do not reach the age groups that are high users of nursing home services.

Conclusions

Top Revised Funding Outlook Public-Sector Spending Private-Sector Spending Revised Medical Services... Conclusions NOTES

 
Our most recent projections have two important differences from last year’s projection. First, the economy is in recession and is expected to grow more slowly in 2002. Second, near-term Medicare and Medicaid spending growth is now projected to be stronger as a result of recent legislation. Thus, the current projection shows that health spending accounts for an even larger share of GDP than our previous estimates indicated.

However, our general pattern of health spending growth remains consistent with last year’s projection. In 2001 and 2002 real health spending growth (national health expenditures divided by the GDP deflator) is expected to grow on average 6.6 percent per year. These rates of growth represent a marked acceleration from the 1993–1998 period, when real national health expenditures grew 3.6 percent per year, and in line with the high growth rates during 1980–1992, when real national health expenditures grew 6.2 percent per year. This acceleration is caused by strong recent income growth, additional public funding from recent legislation, and increases in relative price inflation following the period of increased discounting associated with the rapid spread of managed care.

From 2003 to 2011 real national health spending growth is projected to average 3.8 percent a year, well below 1980–1992 and 2001–2002. This reflects slower growth in utilization, intensity of care, and relative medical price inflation. The expected trends in utilization and intensity of care are based on slower than historical growth in real per capita incomes and a continued (smaller) impact of managed care. Lower relative medical price inflation reflects in part a slowdown in projected input price inflation. However, during this period real health spending growth is expected to outpace real economic growth, resulting in a continually growing share of the nation’s resources being allocated to health care.

Editor's Notes

 
The authors are staff at the Office of the Actuary, Centers for Medicare and Medicaid Services (CMS), in Baltimore.

The authors thank Steve Calfo, Mary Lee Seifert, and Art Sensenig for their assistance in producing these projections, and Sally Burner, Cathy Cowan, Cathy Curtis, Rick Foster, Mark Freeland, John Klemm, Katie Levit, and anonymous peer reviewers for their helpful comments. The opinions expressed here are the authors’ and do not necessarily represent those of the Centers for Medicare and Medicaid Services.

NOTES

Top Revised Funding Outlook Public-Sector Spending Private-Sector Spending Revised Medical Services... Conclusions NOTES

 

1. S. Heffler et al., "Health Spending Growth Up in 1999; Faster Growth Expected in the Future," Health Affairs (Mar/Apr 2001): 193–203.
2. It is assumed that there will be no new legislation or changes to current legislation affecting Medicare or Medicaid. 2001 Annual Report of the Board of Trustees of the Federal Hospital Insurance Trust Fund, House Document 107-54 (Washington: U.S. Government Printing Office, 2001); and 2001 Annual Report of the Board of Trustees of the Federal Supplementary Medical Insurance Trust Fund, House Document 107-53 (Washington: GPO, 2001).
3. For descriptions of the national health expenditures projections models, see S. Smith et al., "The Next Decade of Health Spending: A New Outlook," Health Affairs (July/Aug 1999): 86–95; and Centers for Medicare and Medicaid Services, "Projections of National Health Expenditures: Methodology and Model Specification," <www.hcfa.gov/stats/nhe-proj/proj2001/Methodology> (available 12 March 2002).
4. The most significant of these changes is a 2.1-percentage-point decrease in projected 2001 real GDP growth (based on actual data through the third quarter) and a 2.4-percentage-point decrease in projected 2002 real GDP growth. Board of Trustees, Federal Old-Age and Survivors Insurance and Disability Trust Funds, 2001 Annual Report of Board of Trustees of the Federal Old-Age and Survivors Insurance and Disability Trust Funds, House Document 107-55 (Washington: GPO, 2001).
5. Our projections of private health spending account for the effects of the September 11 attacks only indirectly through their effects on our macroeconomic assumptions. For example, although anecdotal information suggests an increase in counseling visits, particularly in the Northeast, our projections of private health spending do not explicitly account for this.
6. K. Levit et al., "Inflation Spurs Health Spending in 2000," Health Affairs (Jan/Feb 2002): 172–181.
7. Monthly Treasury Statement of Receipts and Outlays of the United States Government (Washington: GPO, September 2001), 1–32. "Cash" expenditures measure amounts actually spent in the year. National health expenditure amounts, including Medicare, reflect "incurred" costs—that is, the cost for services performed in the year, even if paid in a later year.
8. The case-mix measure represents the recorded average complexity of hospital inpatient services. This revised assumption increases projected growth by 0.5 percentage points per year. Report of the Technical Panel is available online at <www.hcfa.gov/pubforms/actuary/TechnicalPanel> (27 December 2001).
9. The sustainable growth rate (SGR) system establishes targets for the rate of growth in physician services based on several factors including the rate of growth in the real per capita GDP. Adjustments are made to future physician fee schedule updates for actual spending growth differing from the targets established by the SGR. More detail on the SGR system is available at <www.hcfa.gov/pubforms/actuary/SGR/> (27 December 2001).
10. Monthly Treasury Statement of Receipts and Outlays of the United States Government (Washington: GPO, September 2001), 1–32.
11. Testimony of Michael T. Osterholm, director, Center for Infectious Disease Research and Policy, School of Public Health, University of Minnesota, before the Senate Health, Education, Labor, and Pensions Subcommittee on Public Health, Hearing on Bioterrorism, 9 October 2001.
12. Watson Wyatt Worldwide, Health Care Costs 2002—Watson Wyatt Worldwide Survey Results (Washington: WWW, 15 October 2001).
13. Henry J. Kaiser Family Foundation and Health Research and Educational Trust, Employer Health Benefits, 2000 Annual Survey (Menlo Park, Calif.: Kaiser/HRET, 2000). The estimate was 11 percent premium growth per enrollee for all firms in 2001. Watson Wyatt Worldwide, Health Care Costs 2002; Andersen Consulting, Health Care Cost Trend Survey for 2002 (Washington: Andersen, 25 October 2001); and Hewitt Associates, "Double-Digit Health Care Cost Increases Expected to Continue in 2002" (Washington: Hewitt Associates, 29 October 2001).
14. The underwriting cycle refers to the "cyclical pattern of ‘underwriting profits,’ defined as profitability exclusive of investment income."; J. Gabel et al., "Tracing the Cycle of Health Insurance," Health Affairs (Winter 1991): 48–61.
15. American Hospital Association, 1999 American Hospital Association Annual Survey (Chicago: AHA, 2000).
16. U.S. Bureau of Labor Statistics, Employment and Earnings, October 2001 (Washington: GPO, 2001), 98–122.
17. U.S. Bureau of Labor Statistics, PPI Detailed Report, November 2001 (Washington: GPO, 2001), 124–137.
18. B.R. Strunk, K. Devers, and R.E. Hurley, "Health Plan-Provider Showdowns on the Rise," Issue Brief no. 40 (Washington: Center for Studying Health System Change, June 2001).
19. Kaiser/HRET, Employer Health Benefits, 2000.
20. AHA, National Hospital Indicators Survey (Chicago: AHA, 2001).
21. BLS, Employment and Earnings, October 2001, 98–122.
22. For a comparison of other recent forecasts, see M. Merlis, "Explaining the Growth in Prescription Drug Spending: A Review of Recent Studies," August 2000, <aspe.hhs.gov/health/reports/drug-papers/merlis/merlis-final.htm> (29 January 2001); and IMS Health, "IMS Health Forecasts 9 Percent Annual Growth in 10 Leading Global Pharmaceutical Markets through 2005," 14 June 2001, <www.imshealth.com/public/structure/dispcontent/1,2779,1341-1341-129257,00.html>5 (27 December 2001).
23. Tiered payment systems incorporate different cost-sharing formulas for generic and brand-name drugs on and off the formulary.
24. DTC advertising spending was added to our drug model for this year’s projections.
25. IMS Health, "IMS Health Reports U.S. Pharmaceutical Promotional Spending Reached Record $13.9 Billion in 1999," 20 April 2000, <www.imshealth.com/public/structure/dispcontent/1,2779,1203-1203-75077,00.html> (27 December 2001).
26. F.R. Lichtenberg, "Are the Benefits of Newer Drugs Worth Their Cost? Evidence from the 1996 MEPS," Health Affairs (Sep/Oct 2000): 241–251.
27. D. Stipp, "He’s Brilliant. He’s Swaggering. And He Soon May Be Genomics’ First Billionaire," Fortune, 25 June 2001, 101–112.
28. M. Cabot, "Whither Genomic Medicine," The World and I (Washington: Washington Times Corporation, October 2001).

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				H. M. Krumholz, W. S. Weintraub, W. D. Bradford, P. A. Heidenreich, D. B. Mark, and A. D. Paltiel Task Force #2--the cost of prevention: can we afford it? Can we afford not to do it? J. Am. Coll. Cardiol., August 21, 2002; 40(4): 603 - 615. [Full Text] [PDF]