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For the period 1990-95, we will present data on health care spending by business, households, and government. In addition, we will measure the relative impact of these expenditures on each sector's ability to pay. In 1994 and 1995, health care costs experienced the slowest growth in 3 decades. Combined with healthy revenue growth, slow cost growth helped ease or stabilize the financing burden faced by business, households and government.

During the 1990s, growth in health care costs slowed considerably, helping to lessen the spending strain on business, government, and households. Although cost growth has slowed, the Federal Government continues to pay an ever-increasing share of the total health care bill. This article reviews important health care spending trends, and for the first time, provides separate estimates of the employer and employee share of the premium costs for employer-sponsored private health insurance. This article also highlights some of the emerging trends in the employer-sponsored insurance market, including managed care, cost-sharing, and employment shifts.

This article presents data on health care spending for the United States, covering expenditures for various types of medical services and products and their sources of funding from 1960 to 1994. Although these statistics for 1994 show the slowest growth in more than three decades, health spending continued to grow faster than the overall economy. The Federal Government continued to fund an increasing share of health care expenditures in 1994, offset by a falling share from out-of-pocket sources. Shares paid by State and local governments and by other private payers including private health insurance remained unchanged from 1993.