What is Driving Health Care Cost Increases? – January 2003

In recent years, the cost of health care has been increasing. According to the Centers for Medicare and Medicaid Services (CMS), national health expenditures increased almost 33 percent from 1995 to 2000 ($990 billion to $1.3 trillion). CMS estimates spending to have increased another 19 percent through 2002 – to $1.55 trillion. The change in the consumer price index (CPI) for medical care has exceeded the change in the CPI for all products each year for the past 10 years. Let’s look at some contributing factors to the increasing costs.