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 1994.
11.22 :  1993 National Health Expenditures

Contact:  Anne Verano    (202) 690-6145
November 22, 1994

                NATIONAL HEALTH EXPENDITURES FOR 1993

     America's health expenditures increased to $884.2 billion in
1993, up 7.8 percent from 1992, according to data released today
by HHS Secretary Donna E. Shalala.  The nation's health
expenditures in 1993 amounted to an estimated average of $3,299
per person, $205 more than in the previous year.  

     Although health spending in 1993 grew at its slowest rate of
increase since 1986, it still increased 2.4 percentage points
faster than the overall economy as measured by the gross domestic
product -- the total value of goods and services produced in the
United States.  As a result, the share of GDP for health care
rose from 13.6 in 1992 to 13.9 percent in 1993.

     "Slow growth in health spending appears to result more from
very low inflation in the rest of the economy rather than from
any permanent changes in the health sector," Secretary Shalala
said. 

     "We still need to address the underlying causes that are
driving up health care spending faster than other costs and
distorting our health care delivery system."

     The data released today will be published in the fall
edition of the Health Care Financing Review, the quarterly
journal of the Health Care Financing Administration. 

     The national health expenditures consist of two major
components:  health services and supplies and research and
construction.  Expenditures for health services and supplies
amounted to $855.2 billion in 1993, while research and
construction expenditures, representing investment in future
health care resources, amounted to $29.0 billion in 1993. 
However, 88.5 percent of the total national health expenditures
were for personal health care services and products.  In 1993,
the personal health expenditures grew to $782.5 billion, an
increase of 7.2 percent from the $729.7 billion spent in 1992.  

     According to the report, the federal government was the
fastest growing payer of health care, paying 31.7 percent of the
nation's health care bill.  This was up from 28.1 percent in
1990, creating the first significant increase in the share of
spending from federal sources since Medicare began covering the
disabled population in the early 1970s.

     The Medicare and Medicaid programs spent $272.1 billion for
health care in 1993.  This accounted for 30.8 percent of health
spending and 70.2 percent of all public funding of health care. 

                                - 2 -

     Bruce C. Vladeck, the administrator of the Health Care
Financing Administration, noted that reversing the pattern of 
nearly a decade, Medicare outlays per enrollee grew more rapidly
than private insurance in 1992 and 1993.  Changes resulting from
President Clinton's budget policies, enacted in OBRA '93, and 
other administration initiatives, will provide the basis to
return to the earlier pattern within the next few years."

     The 1993 rate of growth for the federal and state Medicaid
program was 9.2 percent, a dramatic decrease from the 1992 growth
rate of 15 percent, and the 1991 growth rate of 24.5 percent.

     In calendar year 1993, the federal share of Medicaid
spending was $76.1 billion.  The state and local share of
Medicaid spending was $41.8 billion.  In fiscal year 1993, there
were 33.4 million people who received some type of Medicaid
benefit.     

     The federal Medicare program spent $154.2 billion for
benefits and administrative costs in calendar year 1993.  As of
July 1, 1993, 36.3 million aged and disabled people were enrolled
in Medicare.

     Private health insurance, the major private payer of health
care costs, paid for one-third of all health expenditures in 
1993, the same share it has paid since 1988.

     The share of health spending from private out-of-pocket
sources continued to decrease, falling to 17.8 percent of health
spending in 1993 from 19.9 percent in 1990.


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