Report: That recent deceleration in healthcare spending? Yeah, that’s probably over
posted at 4:41 pm on April 16, 2014 by Erika Johnsen
For about a decade, the rate at which healthcare costs inflate has been slowing down markedly, with an especial plateau in the last several years (from 2009 to 2012, the rate stayed at just under 4 percent) — a slowdown for which ObamaCare’s supporters have almost bizarrely been heard taking credit. The general downward trend in price growth is attributable to various advances in the healthcare system over the years, and the recent plateau is almost certainly due to the economic recession that had a lot of people declining/deferring healthcare services they might otherwise consume if their belts weren’t so tight. That’s exactly why I find it so weird that any advocate for the president’s crowning legislative achievement would try to assign the law the credit for the slowdown: It makes it much harder for them to dissociate any future price acceleration from the law, and since ObamaCare directly incentivizes a whole lotta’ people to consume healthcare services they wouldn’t otherwise, that’s going to be a particularly tough task.
A new report is suggesting that healthcare spending rates started to tick back upward again in 2013, probably thanks to a somewhat less sluggish economy, and that the return to the fast-growing pricing trend may be just around the corner. Via the LA Times:
A historic slowdown in U.S. healthcare spending in recent years may be drawing to a close.
An industry report published Tuesday and healthcare experts point to a steady rise in medical care being sought by consumers seeing specialists, getting more prescriptions filled and visiting the hospital. Other factors such as millions of newly insured Americans seeking treatment for the first time and higher prices from healthcare consolidation could also help drive up costs.
Experts aren’t predicting an immediate return to double-digit increases in medical spending. But the emerging trend underscores how difficult it will be for policymakers, employers and health plans to control healthcare costs going forward. …
David Gruber, director of healthcare research at Alvarez & Marsal, said he’s expecting a similar trend of higher demand coupled with consolidation among hospitals and large physician groups pushing up prices. He said the demand for services is being driven by an influx of Obamacare enrollees, aging baby boomers and people with chronic conditions who can no longer delay care.
“At some point you can’t defer anymore,” Gruber said. Health spending “isn’t going up by double digits, but it could spike to 6% or 7%.”
There are going to be so many factors a play here in the next few years that it’ll be difficult to sort out exactly what is causing what, but it’s worth noting that the pricing slowdown the Obama administration has been using as a PR tactic is likely to get obliterated largely by their own program as the demand increases and puts more strain on the system — and, hence, that the government-mandated expansion of health insurance is not necessarily going to equate with increased access or quality care for more people.
Breaking on Hot Air