The Healthcare Spending Squeeze

In a new WashACE Competitiveness Brief, we take an in-depth look at health care spending in the state budget.

The Healthcare Spending Squeeze , prepared by the Washington Research Council, examines the effect of rapid growth in health care spending on the state budget, noting that from 1997-99 through 2005-2007, health-related spending grew by 85.5 percent, compared with a 30.1 percent growth in non-health-related spending. Health care spending in the 2005-07 biennium amounted to one-third of all Near General Fund Spending, up 7.6 percentage points over the 1997-99 biennium.

Rising health care costs squeeze virtually all other state priorities and drive up the operating cost of state government. The brief also looks at the costs of state employee health care benefits, a growing share of compensation and extraordinarily generous when compared with the private sector.

Controlling health-related spending will play a critical role in overall budget discipline, with clear and direct implications for our state's economic competitiveness. A second brief to be released in December will examine various health care "reform" proposals to be considered by lawmakers next year.