Health care cost U.S. families extra $893 in year, study says

October 23, 1992|By Boston Globe

The average American family suffered a 5.3 percent, or $893, drop in take-home pay this year, because health care costs have outstripped general economic growth by 50 percent, according to a "damage report" released yesterday by the Service Employees International Union.

The lost wages would add up to more than $4,000 since 1980, the assessment said.

Health care costs are to blame for a 4.4 percent decline in the average American's hourly wage since 1980, the analysis said. If the costs had grown no faster than the economy generally during the past 12 years, wage-earners' income would have held steady since 1980.

During that period U.S. families have also had to pay escalating out-of-pocket medical expenses. Bills not covered by health insurance rose from $939 in 1980 to more than $2,300 this year.

"Working families have paid for our country's failure to control runaway health costs with squeezed family budgets and falling income standards, and these costs in turn are one of the most important causes of our sick economy," said John Sweeney, president of the million-member Service Employees International Union, who also chairs the AFL-CIO's health care committee.

Excess health care costs totaled $1.2 trillion since 1980, the analysis found.

Mr. Sweeney said in an interview that the "intent of this report is to convince the Congress that we have to move on health care reform or this will continue to get worse."

Although the report takes no position on which reform plan should be enacted, Mr. Sweeney said proposals that rely on "the private marketplace" to control costs, such as President Bush's plan, are likely to fail. He favors a plan, such as one advocated by Gov. Bill Clinton, that would set an annual limit on national health expenditures pegged to growth in the gross national product, with allowances for demographic changes and new technology.

The service union's report compared the impact of a 12.5 percent yearly average increase in health care costs since 1980 with a 8.3 percent annual average growth in gross national product over that period. Currently health care inflation is running at 10.7 percent, while the GNP is growing at about 2 percent, according to Peggy Connerton, the union's policy director.

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