Slowdown in Health Costs’ Rise May Last as Economy Revives
Source: NY Times
By ANNIE LOWREY
WASHINGTON — One of the economic mysteries of the last few years has been the bigger-than-expected slowdown in health spending, a trend that promises to bolster wages and help close the wide federal deficit over the long term — but only if it persists.
Major new studies from researchers at Harvard University, the Henry J. Kaiser Family Foundation and elsewhere have concurred that at least some of the slowdown is unrelated to the recession, and might persist as the economy recovers. David M. Cutler, the Harvard health economist and former Obama adviser, estimates that, given the dynamics of the slowdown, economists might be overestimating public health spending over the next decade by as much as $770 billion.
Between 2009 and 2011, total health spending grew at the lowest annual pace in the last five decades, at just 3.9 percent a year, although rising out-of-pocket costs have hit millions of families. In contrast, between 2000 and 2007, those annual growth figures ranged between 6.2 and 9.7 percent, according to government figures. Data from the Altarum Institute, a nonprofit research organization in Ann Arbor, Mich., suggests that the low pace of growth has continued through 2012 and early 2013.
The studies — including some released Monday in the journal Health Affairs — shed new light on the precise mix of factors that have led to the flattening-out.
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