Slowdown in Health Care Spending Might Be Short-Lived, Analysts Say
Although health care spending in the U.S. increased by 3.9% in 2011 -- the lowest rate since the 1960s -- it still makes up almost 18% of the country's gross domestic product and there are a number of powerful pressures that could resume the upward trend in spending, the Wall Street Journal reports.
Reports released in recent months by the IMS Institute for Healthcare Informatics and the Kaiser Family Foundation have pegged much of the deceleration in health care spending growth to several factors, such as lower prescription drug prices and reduced demand for drugs, physician visits and elective surgeries as a result of the economic slowdown.
Meanwhile, a recent Health Affairs study by Harvard University researchers found that health care spending has declined because hospitals are more efficient, fewer new blockbuster drugs have entered the market and consumers are sharing a larger portion of their medical expenses. The authors suggested that if the trends continue, public-sector health spending could be $770 billion less than estimated over the next decade.
Spending Slowdown Could Be Temporary
Some of the recent reports warned that health care spending could pick up as the economy continues to recover. For example, according to the Journal, spending likely will rise when the Affordable Care Act is fully implemented next year and millions of U.S. residents obtain health insurance through Medicaid or private health plans. The increase "may or may not be offset" by a decline in unreimbursed care, the Journal reports.
How Health Care Spending Might Be Contained
In an effort to prevent health care spending from rising sharply in the future, Arthur Kellermann -- a physician and senior policy analyst at RAND -- said Medicare should be allowed to use comparative effectiveness research to determine the most effective and cost-efficient treatments that it will cover. He added that patients who select costly treatments should pay the difference in cost, eliminating any concern of so-called health care rationing and giving individuals choices in their treatment (Beck, Wall Street Journal, 7/14).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.