clarinews@clarinet.com (02/02/90)
WASHINGTON (UPI) -- Health care spending rose 2.5 percent per year faster than other spending from 1947 through 1987, and the health sector now accounts for 11.5 percent of the gross national product, compared to less than 5 percent 40 years ago, a study showed Thursday. In an article published in the journal Science, Stanford University economist Victor Fuchs said there appears to be two major factors behind the growth ``gap'' that has developed between the health care industry and other sectors in the past 40 years. ``Health care prices rose 1.6 percent more rapidly than other prices, while the quantity of health care grew 0.9 percent per annum faster than other quantities,'' said Fuchs, who is also a research associate at the National Bureau of Economic Research. The economist said there are no indications of that trend reversing, with many experts predicting that health care will account for 15 percent to 20 percent of the U.S. gross national product within a few decades. Currently, health care is a $600 billion-a-year industry, making up 11.5 percent of the GNP. Many other industrial countries have a substantially lower share of their GNP linked to health care. The share is less than 7 percent in the United Kingdom and less than 9 percent in Canada, even though both nations have national health insurance, Fuchs said. The Stanford professor said growth in medical services is not necessarily bad because it may ``increase the possibility of delivering high-tech state-of-the art medicine to all Americans.'' ``On the other hand, it would exacerbate the diversion of resources from other pressing needs such as child care, education, the environment, housing and transportation,'' he added. Beyond escalating prices and increased quantity of services, Fuchs said it is hard to pinpoint more precise reasons for the U.S. health sectors seemingly boundless growth. ``Many factors, including wages, productivity, technology and insurance contributed to these trends. No single explanation suffices, and no simple solution is apparent,'' Fuchs said. _a_d_v_ _6_ _p_m_ _e_s_t -- This, and all articles in this news hierarchy are Copyright 1990 by the wire service or information provider and licenced to Clarinet Communications Corp. for distribution. Except for free samples, only paid subscribers may access these articles. Any unauthorized access, reproduction or transmission is strictly prohibited. We will reward the first provider of information that helps us stop violators of this copyright. Send reports to reward@clarinet.com.