America’s Health Care Spending Keeps Rising Really Slowly. Seriously.

[Greenbeard]

HuffPo reports on the release of the national health spending numbers for 2017 today: the era of unusually slow health care cost growth continues.

America’s Health Care Spending Keeps Rising Really Slowly. Seriously.

There’s good news in the latest official government report on national health care spending. That will be a surprise to most people who actually use the American health care system.

Last year, the rate of growth in the total amount of money U.S. residents, businesses and governments spent on health care was just 3.9 percent, the lowest since it was 3 percent in 2013. America spent $3.5 trillion on health care in 2017, according to a report by the independent Office of the Actuary at the federal Centers for Medicare and Medicaid Services that appeared in the journal Health Affairs on Thursday.

The enactment of the Affordable Care Act occurred during this period, specifically in March 2010. In the years that followed, that law used federal money to expand health coverage through subsidized private health insurance and expanded Medicaid eligibility. That new money being pumped into the system increased the rate of growth, as expected. But the law also included cost-containment provisions, especially significant reductions in how much Medicare pays for hospital care and other medical services, that provided a counter-effect.

In fact, the United States is spending more than $2 trillion less on health care than predicted before the Affordable Care Act became law. Experts then and now never arrived at a consensus for why double-digit annual percentage increases in national health care spending abated. Everyone agrees that economic downturns and slow recoveries led to less growth in health care spending.

What still isn’t clear is why that trend continued amid the largest increase in health coverage since the creation of Medicare and Medicaid in 1965 coupled with an improving economy and a plummeting unemployment rate.

The rate of growth in health care spending ticked back up in 2014 and 2015 as federal dollars flowed out to expand coverage under the Affordable Care Act. This followed several years of historically low increases in spending.

But the trend reversed itself in 2016 and continued last year, with the rate of increase dropping back down to less than 5 percent, where it had been in the late 2000s and early 2010s.

Flashback to October 2010: the CMS actuaries projected what the ACA would do to national health spending growth rates (the red line below), as compared to what was projected to happen in the absence of the ACA based on pre-ACA trends (the blue line below). Either way, we were supposed to be heading for 6%+ annual growth from 2013 onward, with a big spike pushing growth above 8% in 2014 when the ACA coverage expansions launched.

The actual story (in green below) has been a little different.

 

[Hawkeye10]

HuffPo reports on the release of the national health spending numbers for 2017 today: the era of unusually slow health care cost growth continues.

America’s Health Care Spending Keeps Rising Really Slowly. Seriously.



Flashback to October 2010: the CMS actuaries projected what the ACA would do to national health spending growth rates (the red line below), as compared to what was projected to happen in the absence of the ACA based on pre-ACA trends (the blue line below). Either way, we were supposed to be heading for 6%+ annual growth from 2013 onward, with a big spike pushing growth above 8% in 2014 when the ACA coverage expansions launched.

The actual story (in green below) has been a little different.

We need to decrease sending...... a lot......expenses growing at double or triple inflation when we have seen worse is NOT winning.

 

[Phys251]

We need to decrease sending...... a lot......expenses growing at double or triple inflation when we have seen worse is NOT winning.

I've sent less mail in recent years. Does that count?

 

[Hawkeye10]

I've sent less mail in recent years. Does that count?

Did you do this to your brilliant professors too?

 

[Phys251]

Did you do this to your brilliant professors too?

Malfunction. Did not compute.

 

[Greenbeard]

We need to decrease sending...... a lot......expenses growing at double or triple inflation when we have seen worse is NOT winning.

Health care in 2017 stayed at the same percentage of GDP (17.9%) as in 2016 because it's not growing faster than the rest of the economy.

 

[Threegoofs]

Health care in 2017 stayed at the same percentage of GDP (17.9%) as in 2016 because it's not growing faster than the rest of the economy.

Thanks, Obama! [emoji846]