We’ve all heard a lot about the slowing of health care cost inflation. Yet, coming from Dan Diamond of The Advisory Board, here are some very interesting points of relevance to the topic:
“A lot of people have noted that health care spending has slowed,” Amitabh Chandra, an economist and the director of health policy research at the Harvard Kennedy School, told me last week.
“Many of us would like to think that this is a more permanent slowdown,” he added.
“Federal spending for health care programs is growing much faster than other federal spending and the economy as a whole,” according to a recent analysis from the Congressional Budget Office (CBO).
We said as much in these pages when we reminded you that health care’s portion of the federal budget keeps doubling every 20 years or so. By now it eats up 25% of the budget. Will it really be 50% two decades hence?
The words of the late economist Herbert Stein come to mind: “If something cannot go on forever, it will stop.”
In late April, the Bureau of Economic Analysis released an advance estimate of first-quarter GDP that had one noticeably eye-popping statistic — spending on healthcare grew 9.9%, the biggest percent change in more than three decades.
I'm still digesting exactly what this means for health care policy, but if the
growth in health care costs is being "driven by the number of treated enrollees
as opposed to the cost of treatment," is that a problem?:
Center-left Washington is arguing with ever-greater ferocity that center-right Washington is mistakenly obsessed with deficit reduction. Part of the argument is familiar: 1. Low Treasury interest rates show markets unconcerned about the $16 trillion national debt. 2. As the economy continues to heal, annual deficits will shrink substantially.
Peter Orszag: Economy Can’t Be All That’s Slowing Health Costs:
A new set of projections released last week by Medicare’s actuaries… suggests the deceleration in the growth of health costs we’ve seen over the past few years is ephemeral… [due] to the “lingering effects of the economic downturn and sluggish recovery” and to increases in cost sharing. Both of these explanations have serious shortcomings….