Private Consumer Expenditures for Medical Care and Voluntary Health Insurance, 1948–63

PRIVATE CONSUMER expenditures for medical care amounted to an estimated $23.7 billion in 1963 or 7.3 percent more than in 1962. Thus, total consumer expenditures for health purposes are continuing to expand at about the same pace as in recent years. In 1962 the increase from the preceding year was 7.6 percent; in 1961, it was 5.4 percent, ; and in 1960, 6.7 percent. Private consumer expenditures for hospital care rose 12 percent in 1963, to $7.0 billion. Consumer expenditures for the services of physicians in private practice amounted to an estimated $6.4 billion, an increase of 6 percent. Expenditures for drugs and drug sundries amounted to $2.2 billion -4 percent more than in the preceding year. Per capita expenditures for medical care amounted to $126.93, an increase of 5.7 percent for the year. Of total consumer expenditures, $15.7 billion was in t,he form of direct, payments by patients and about $8 billion in the form of payments for hea1t.h insurance; $7 billion of the $8 billion represented payments for health services or benefits, and a little more than $1 billion represented payments for insurance service-that is, the amount retained by health insurance organizat,ions for expenses, additions to reserves, and profits. The present article is the most recent in the series published annually in the BULLETIN and going bac.k to 1948. The data presented in the December 1963 issue for the years 1960-62 have been revised in the light of more recent, or correct.ed information and improvements in estimating techniques. Generally the changes are small. Table 1 shows consumer expenditures for medical care for selected years from 1948 to 1963.’ In table 2, consumer expenditures are distributed between direct, out-of-pocket payments for health services and supplies and premiums paid for heslth insurance. The premiums are further broken down into (1) the expenditures of health * Division of Research and Statistics. 1 For data for the years not shown, see the Blblletin, December 1962, pages 3-13. insurance organizations for services or benefits and (2) the amounts retained by them for operating expenses, additions to reserves, and profits. The latter can be considered i1S the net cost t0 consumers for healtll insurance service. There is an inexactness in this table because all payments for health insurance are shown as allocated to either hospital care or physicians’ services; insurance coverage of other types of care, as yet relatively small in :u~~~unt, is here included mainly with insurance covering physicians’ services. Table 3 shows private consumer expenditures for medical care in relation to national disposable personal income.