Census Bureau Finds Health Spending Growth Moderate in Q2
Health spending grew modestly in the second quarter, despite the coverage expansion under the Affordable Care Act and a recovering economy, according to a Census Bureau report released Thursday, the Wall Street Journal reports (Leubsdorf, Wall Street Journal, 9/12).
The quarterly survey estimates operating revenues for hospitals, physician offices, nursing homes and other types of ambulatory health care providers in the U.S (Evans, Modern Healthcare, 9/11).
According to the report, total revenue at health care and social assistance companies increased by 3% in the second quarter, when compared with the first quarter. More specifically, hospital revenue increased by 2.8% over the first quarter of the year, while physician office revenue increased by 4.1% (Wall Street Journal, 9/12).
According to the report, health and social spending grew by 3.7% from the second quarter of 2013 to the same quarter in 2014 (Hancock, Kaiser Health News, 9/11). Overall, the report estimated that health spending grew by 0.5% in the quarter, when adjusted for inflation.
Kaiser Family Foundation Senior Vice President Larry Levitt said the report shows that the "modest acceleration in health spending" during the second quarter likely was driven by "more people insured under the Affordable Care Act and the recovering economy putting some upward pressure on health care costs" (Wall Street Journal, 9/12).
Spending Growth Slower Than Expected
Some economists had predicted that the rollout of the ACA, and the subsequent coverage expansion, would lead to higher health care spending. Meanwhile, CMS projected national health care spending to grow by 5.6% this year.
However, the most-recent spending estimates "are quite a bit lower than what the folks at CMS were projecting," according to Altarum Institute Center for Sustainable Health Spending Director Charles Roehrig.
Further, the spending growth still is far below the "painful levels of a decade ago," according to Kaiser Health News.
Outlook Could Change
KHN reports that the "report is far from ... the last word," noting that it does not include spending on prescription drugs, which has been rising in the last year because of costly specialty medications.
Further, KHN reports that although the Census Bureau's report indicates "tame cost trends" when comparing second-quarter figures year-to-year, the growth between the first and second quarters of this year rose at an annual rate of 12%, which would be alarming if it continues throughout the year. However, experts do not believe that pace will continue, according to KHN (Kaiser Health News, 9/11).
Levitt said newly insured consumers who enrolled in coverage toward the end of March "didn't actually get their insurance cards until May," so "this is when you'd expect to see the effects" (Wall Street Journal, 9/12). As a result, the year-over-year results might be a better indicator of health spending growth, Roehrig said (Kaiser Health News, 9/11).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.