Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, January 14, 1994                   TAG: 9401140175
SECTION: BUSINESS                    PAGE: A-5   EDITION: METRO 
SOURCE: Knight-Ridder/Tribune
DATELINE: WASHINGTON                                LENGTH: Medium

RISE IN PRICE OF HEALTH CARE SLOWS DRAMATICALLY IN `93 . . .

The Labor Department reported Thursday that consumer prices for medical care rose 5.2 percent in 1993, the slowest growth rate since 1973, when price controls on health care and other areas were imposed.

The slowdown included a dramatic slowing in drug prices - a favorite target of the Clinton administration - to a 3.3 percent rise, also the smallest in 20 years.

"Market forces have begun to provide some slowing," economist William Griggs, with the consulting firm Griggs & Santow, said in response to the report. "It's not just a 1992 phenomenon, but 1993 has been particularly impressive in that regard."

Health care inflation also slowed in 1992 and 1991, but it remains a high priority in Congress and the White House because it is still one of the fastest-growing costs in the American economy, and for the government.

The report came as 560 academic economists released a letter to President Clinton urging him to rethink his health care proposals.

"Your plan sets the fees charged by doctors and hospitals, caps annual spending on health care, limits insurance premiums and imposes price limitations on new and existing drugs," the economists wrote. "These controls will hurt people, and they will damage the economy."

Professor John Lott of the University of Pennsylvania's Wharton School, the letter-writing effort's organizer, told a news conference that the health care industry already is "retrenching" in anticipation of the effects of Clinton's plan.

However, the White House criticized the letter and said its plan did not rely on price controls.