Rise in health care spending lowest on record

[zipplewrath]

4. Don't get too excited

This has been known for most of this year. The problem is that much of it is connected with the fact that people are so affected by the recession, they've been doing cost avoidance.

"An economy hobbled by the recession and 2008 economic crisis played a role in some of the reduced spending growth, officials said,..."

The thing to keep an eye on is this:

"...health care inflation is the lowest it has been in 50 years..."

They don't say what that is, but the latest data I know has it around 2.3%. That's good, because the historical average is more around 5.5%. And the administration was projecting a 6-7% rate going forward into the foreseeable future. 2% would be huge if it could be sustained. I suspect it can't. The industry is affected by some of the same inflationary forces that the rest of us are and lately it's been 1%, so the health care rate is still well above that.

I'm a little suspicious that the administration was probably a touch conservative in it's inflation rate predictions and that it may be more around 4-5% (okay, I HOPE they were).