Health care costs have been the topic of discussion for quite some time now, and not without reason. U.S. health care expenses have been growing much more rapidly than other developed countries for some time. In 2011, the U.S. spent $8,608 per person on healthcare. This is more than two-and-one-half times what other developed countries, like France, Sweden and the United Kingdom, spend. The conversation has pivoted from the seemingly uncontrollable growth of health care spending to a slowdown of spending in the past few years.
New data released earlier this month by the Office of the Actuary at the Centers for Medicare & Medicaid Services shows that national health costs grew by only 3.7 percent in 2012. While this might not seem like a significant number, the implications are pretty exciting. For the first time since 1997 the percentage of the overall economy devoted to health spending fell. This also marks the slowest rate of growth four years in a row since 1960. The full report is available in the journal Health Affairs.
Like all things related to health care, there is a lot of information and equal amount of speculation regarding whether or not this is a lasting trend and what factors might have contributed to it. Jeanne Lambrew of the White House blog attributes the slowdown to fundamental changes in the health system as a result of the Affordable Care Act – the bending of the cost curve touted by President Obama. Sarah Kliff of the Washington Post on the other hand provides two explanations. Yes, Lambrew’s hypothesis might be correct, but there are other broader economic factors to consider, such as the beginning of the recession in 2009.
It might be one or the other or a combination of both. No one really knows how long the slowdown will last. For now, it’s a move in the right direction. We’ll take it.
Here are a few more viewpoints from others with fingers on the pulse of this issue:
Another Modest Rise for Health Costs. NY Times by Robert Pear
Health Care Costs Grew More Slowly Than the Economy in 2012. National Public Radio by Julie Rovner
Detailed Report Delivers Good News on Health Costs, But Will it Last? Kaiser Health News by Jay Hancock
Health Care Spending Grew at Modest Pace in 2012. The Wall Street Journal by Amy Schatz and Eric Morath
U.S. health spending rose 3.7 percent in 2012 as economy dragged. Reuters reporting by Caroline Humer; editing by Karey Van Hall and Jonathan Oatis