Blogging about health care can be a downer. Exploding health care costs, too many uninsured, Medicare pay cuts, a dysfunctional political culture . . . and so it goes. But I came across a couple of new reports that suggest that there may be some rays of sunshine among all of the clouds.
For one thing, did you know that health care cost increases have hit a 50-year low? That’s right: health care costs in 2009 and 2010, the most recent years for which data are available, had the smallest increase since the days when Elvis Presley was topping the charts. According to the government’s most recent analysis:
“In 2010 extraordinarily slow growth in the use and intensity of services led to slower growth in spending for personal health care. The rates of growth in overall US gross domestic product (GDP) and in health spending began to converge in 2010. As a result, the health spending share of GDP stabilized at 17.9 percent. . . Continued slow growth in private health insurance and out-of-pocket spending (which grew just 2.4 percent and 1.8 percent, respectively) and decelerations in Medicare and Medicaid spending growth (which slowed to 5.0 percent and 7.2 percent, respectively) contributed to overall low growth in 2010.”
Oh, and another piece of good news in the report. You know the allegation that “ObamaCare” has caused a big spike in health care spending? Not so . . . the Affordable Care Act added a statistically insignificant amount to the nation’s health care bill, even as millions of seniors got discounts on their brand name drugs and no-cost preventive services, 2.5 million young adults were able to keep their coverage through their parents’ plans, and children with pre-existing conditions could no longer be dropped from coverage.
It is true that the last two years’ decline in health spending growth might not be entirely good news, since the researchers suggest that some of it may be because people put off needed care during the recession. Some might be luck, like the fact that we had a relatively uneventful flu season.
But another analysis found that annual health care cost increases have been slowing for the past eight years, so neither bad luck (the recession) nor good luck (not a lot of flu) can explain it all.
This doesn’t mean we are out of the woods on health care spending: even though it is increasing at a historically low rate, it is still growing faster than the overall economy. The Congressional Budget Office (CBO) still projects that “spending on the major mandatory health care programs alone would grow from less than 6 percent of GDP today to about 9 percent in 2035 and would continue to increase thereafter. Altogether, the aging of the population and the rising cost of health care would cause spending on the major mandatory health care programs and Social Security to grow from roughly 10 percent of GDP today to about 15 percent of GDP twenty-five years from now. (By comparison, spending on all of the federal government's programs and activities, excluding interest payments on debt, has averaged about 18.5 percent of GDP over the past 40 years.)”
Still, the fact that health care spending growth has been slowing for almost a decade now is good news. Maybe we are starting to figure out a way to deliver care more effectively and efficiently.
People also are healthier, according to another new government report. In 2010, life expectancy increased, the death rates fell for all five leading causes of death, and the death rate from homicide was as low as it’s been in half a century, according to the National Center for Health Statistics.
Policymakers frankly aren’t sure why homicides and health spending growth have dropped so much. As Buffalo Springfield sang in the 1960s, “There's something happening here, What it is ain't exactly clear.” But still, it is good to reflect that despite all of the challenges facing American health care, it isn’t all gloom and doom.
Today’s question: Why do you think health care spending growth has reached historic lows, even as the population is healthier?