• National health spending increased 7. 7% in 2003, the first slowdown in seven years; the 2002 growth level was 9. 3%. (After adjusting for economy wide inflation, health spending increased 5. 8% in 2003, compared with average growth of 6. 9% between 2000 and 2002. )

• Total U. S. health spending in 2003 was $ 1. 7 trillion or $ 5,670 per person.

• U. S. health spending accounted for 15. 3% of the country’s gross domestic product in 2003, an increase of 0. 4% from 2002.

• Total public sector spending on health (Medicare, Medicaid, SCHIP (childrens' health insurance program), other governmental programs) decreased from 9. 7% in 2002 to 6. 6% in 2003.

• Private sector health spending rose 8. 6% in 2003, compared with 9. 0% in 2002.

• Private sector spending accounted for two-thirds of overall health spending increase in 2003; total private spending was $ 913. 2 billion.

• Aggregate out-of-pocket health spending grew 7. 6 % in 2003.

• Medicaid accounted for 16% ($ 267 billion) of total health spending in 2003.

• Medicaid spending decelerated from 12. 1% in 2002 to 7. 1% in 2003 (the first deceleration since 1997).

• More than half of Medicaid spending is for services provided by hospitals and nursing homes.

• Medicare spending was $ 283. 1 billion in 2003, an increase of 5. 7% over 2002 and 4. 3% per enrollee; by comparison, Medicare spending grew 10. 8% in 2001 and 7. 6% in 2002.

• Medicare spending for hospital services increased 5. 3% in 2003, compared with 7. 0% in 2002.

• Medicare spending for nursing home services increased 1. 3% in 2003, compared with 11. 4% in 2002.

• Private health insurance premium growth decelerated for the first time since 1996, increasing 9. 3% in 2003 compared with 10. 7% in 2002.

• Spending for private health insurance benefits rose 8. 2% in 2003, compared with 9. 5% in 2002.

• Net cost (the difference between premiums and benefits) as a share of premiums increased from 11. 9% in 2001 to 12. 8% in 2002 and 13. 6% in 2003.

• In 2003, health insurance enrollment declined by almost 1% for the third year in a row.

• Out-of-pocket spending increased 7. 6% in 2003, compared with 6% in 2002.

• In 2003, 23% of all out-of-pocket spending was related to prescription drug purchases (this figure was up from 17% in 1998).

• In 2003, hospital spending represented almost one-third of total national health spending ($ 515. 9 billion-an increase of 6. 5% in 2003 compared with 8. 5% in 2002).

• Public payers account for 58% of total hospital spending (Medicare-30%; Medicaid and SCHIP-17%; other federal, state and local programs make up the rest).

• Spending for hospital services by Medicare, Medicaid, and other public payers grew 5. 3% in 2003, compared with 8. 4% in 2002.

• Medicaid spending growth for hospital services fell more than six percentage points in 2003 to 5. 3%.

• Medicare hospital spending growth also slowed as supplemental funding provisions expired; it rose 5. 3% in 2003 following growth of 7% in 2002.

• Hospital spending by private payers was relatively stable over the last two years, increasing 8. 6% in 2002 and 8. 4% in 2003.

• Spending for physician services rose 8. 5% in 2003 to $ 369. 7 billion; the 2002 increase was 8. 2%.

• Private sources account for two-thirds of payments for physician services. In 2003, growth accelerated to 9. 4%, up from 8. 2% in 2002.

• Out-of-pocket spending (consumers’ copayments) for physician services rose 8. 3% in 2003, compared with 5. 1% in 2002.

• Growth in public spending for physicians decelerated from 8. 1% in 2002 to 6. 7% in 2003.

• Spending for services provided by freestanding skilled nursing facilities increased 4% in 2003 to $ 110. 8 billion, slightly slower than the average annual spending growth of 5. 3% in 2000-2002.

• Medicaid is the largest public sector source of funding for nursing homes.

• Medicaid nursing home spending growth was 1% in 2003, following 8. 1% growth in 2002.

• Medicare nursing home spending increased only 1. 3% in 2003, following three years of growth that averaged 16. 2% per year between 1999-2002.

• In 2003, retail sales of prescription drugs rose 10. 7% to $ 179. 2 billion (11% of national health spending). The growth rate in 2002 was 14. 9%.

• The number of prescriptions sold in 2003 rose by only half the 2002 rate: 1. 7% per capita compared with 3. 5% in 2002.

• Generic drugs accounted for nearly all of 2003 growth in prescriptions filled; their sales grew at twice the rate of brand-name drug sales.

• Private health insurance spending for prescription drugs slowed in 2003, increasing 7. 4% following a 15. 5% growth rate in 2002.

• Out-of-pocket spending on prescription drugs outpaced that of private insurance by almost 4% in 2003, although it decelerated slightly to 11. 5% from 11. 9% in 2002.

• More than three-quarters of prescription drug payments occur in the private sector.

• Medicaid is the largest payer (19%) in the public sector.

• Medicaid spending for prescription drugs rose 17. 5% in 2003, similar to the previous two years.