How the Economic Slowdown Has Drastically Affected How Much America Spends on Health Care [View all]

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Al Jazeera English / By Laura Tyson

How the Economic Slowdown Has Drastically Affected How Much America Spends on Health Care
The weak economy has caused people to postpone consumption of health care services and has encouraged states and employers to restrain their spending on health.

May 12, 2013 |


Over the last five years, the growth of health care spending in the US has slowed dramatically - to the lowest rate in the past 50 years. The slowdown is not a surprise. It is a predictable result of the recession and slow recovery that have left millions of Americans without health insurance and dampened household spending.

But the size of the slowdown is surprising, as is the fact that it started several years before the 2008 recession - and not only in the private insurance system, but also in Medicare and Medicaid, the two major government health programmes. (Medicare provides health coverage for retirees, and Medicaid provides coverage for low-income Americans and their children and those with disabilities.)

What explains this slowdown in health care spending? How much of it is attributable to the weak economy, and how much is the result of changes in provider and consumer behaviour?

Slowdown

Two recent studies offer different answers, but both predict that at least some of the slowdown will persist even after the economy recovers. That would be good news for the US economy, which currently devotes nearly 18 percent of GDP to health care, by far the largest share among developed countries. It would also be good news for America's fiscal position, because Medicare and Medicaid are the two largest contributors to the long-term federal budget deficit. ....................(more)

The complete piece is at: http://www.alternet.org/personal-health/how-economic-slowdown-has-drastically-affected-how-much-america-spends-health-care