Gino DiCaro

Health care costs 101

By Gino DiCaro, VP, Communications

Capitol Update, July 21, 2006

Spending on health in California reached $169 billion in 2004, a nearly 8 percent increase from the previous year. Health spending now accounts for 11 percent of California's economy (in comparison, health spending nationally accounts for 13 percent of GDP).

These latest health spending numbers for California are available in the California Addendum to California Health Care Foundations' annual Health Care Costs 101. This report provides a snapshot of up-to-date spending data, including four new years of state-specific information.

Key findings include:
  • Health spending in the state grew 7.9% in 2004-the same rate as the U.S. as a whole.
  • In California, as in the rest of the nation, the rate of growth in prescription drug spending continues to slow, with growth rates falling into the single digits (7.6 percent) for the first time since 1997.
  • As in the rest of the country, hospital and physician services comprise the largest share of the health care dollar. Compared to the nation, California spends a slightly higher share for physician services and somewhat less on hospital care.
  • The fastest-growing category of health spending is home health, up 12 percent in the most recent year and up 13.9 percent per year during the past five years.

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