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HEALTH-CARE COSTS TO RISE 11.1 PERCENT TO $449 BILLION IN ’89

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Consumer spending on hospital stays, doctors' fees, health insurance and other health care services will rise 11.1 percent this year to $449 billion, an economic research group predicted Saturday.

Cahners Economics, a research division of Cahners Publishing Co., forecast an 8 percent inflation rate in the health care sector in 1989 - up from the 5.8 percent average between 1985 and 1988.Cahners also said health-care spending, when adjusted for inflation, has grown at a "healthy" 5.4 percent annual rate.

"Either consumers are receiving higher levels of services, or they're bearing a larger share of the health-care burden," said Cahners economist Kim Kennedy. "A combination of both is the likeliest answer."

Consumer spending on health insurance will again see the largest percentage increase, Cahners predicted. The research group predicted consumer spending in that category will surge 17 percent this year to $36 billion.

Spending on personal health insurance had risen annually by 12.4 percent since 1985 and said "the 4.5 percent annual growth in inflation-adjusted spending over the last five years suggests increased levels of coverage," Kennedy said.

Hospitals will receive the largest share of consumer health-care expenditures, totaling $204 billion, and spending on physicians' services will increase 13.1 percent, Cahners said. Spending on physicians' services in 1989 will total $119.6 billion, the category's largest share increase since 1985, it said.

"Consumer spending on hospital services has continued to grow despite cutbacks throughout the decade," Kennedy said.