"Medical spending continues to rise faster than wages and faster than economic growth, and workers are paying much more in healthcare premiums than just a few years ago," said the report by economists from the Centers for Medicare and Medicaid Services, published in the journal Health Affairs.

Two giant government programs together paid a little less than 40% of the nation's healthcare bill. Medicare, which covers the elderly and disabled, and Medicaid, which covers a broad cross- section of low-income individuals, both grew in 2004, but Medicare spending increased more rapidly.

In a separate technical analysis, the government economists concluded that households pay about 32% of all healthcare costs, a bigger share than either employers or federal and state governments. But that calculation involved counting individuals' Medicare taxes as healthcare costs -- something most consumers probably would not think of doing.