Health spend­ing growth hit 53-year low in 2013

Modern Healthcare - - NEWS - By Melanie Evans

U.S. health­care spend­ing grew more slowly last year than at any time in the past half cen­tury as Medi­care squeezed out­lays, mil­lions of Americans con­tin­ued to go with­out health in­surance, and in­sured peo­ple spent at a slower pace, CMS ac­tu­ar­ies said last week.

The na­tion spent $2.9 tril­lion on health­care last year, an in­crease of 3.6% from the prior year and the small­est in­crease since 1960, ac­cord­ing to the re­vised fed­eral es­ti­mate pub­lished in Health Af­fairs. U.S. health spend­ing growth fell be­low 4% in 2009 with the Great Re­ces­sion that stripped pri­vate health in­surance from mil­lions of in­di­vid­u­als. But newly re­vised num­bers show an ac­cel­er­a­tion in 2012 to 4.1% be­fore a spend­ing slow­down last year.

Some an­a­lysts pre­dict spend­ing growth now will tick up­ward given the health­care re­form law’s cov­er­age ex­pan­sion that started in Jan­uary 2014. In­di­ca­tors of spend­ing so far this year are mixed, how­ever. Ma­jor hos­pi­tal chains have re­ported fewer unin­sured and health­ier mar­gins, par­tic­u­larly in states that ex­panded Med­i­caid. But quar­terly na­tional es­ti­mates still put health spend­ing growth be­low 4%.

As a per­cent­age of the econ­omy, health spend­ing last year re­mained at 17.4% of the gross do­mes­tic prod­uct. The slow growth can be traced to the re­ces­sion, the growth of high­d­e­ductible health plans that curb med­i­cal uti­liza­tion, and cost-con­trol pro­vi­sions of the Pa­tient Pro­tec­tion and Af­ford­able Care Act, ac­cord­ing to the fed­eral re­port.

Com­mer­cial health plan en­roll­ment barely re­bounded last year from the re­ces­sion, grow­ing 0.7%. Slower growth in pri­vate in­surance spend­ing, driven in part by the in­crease in high­d­e­ductible plans, con­trib­uted to slug­gish health-spend­ing growth in 2013, said Micah Hart­man, a CMS statis­ti­cian who worked on the new fed­eral es­ti­mate. High-de­ductible plans are 9% to 12% less costly than pre­ferred provider plans, shift­ing more costs to con­sumers.

Medi­care spend­ing cuts con­tained in the Af­ford­able Care Act helped slow Medi­care spend­ing growth, as did the smaller num­ber of baby boomers en­ter­ing the pro­gram after an en­roll­ment rush in 2012. Medi­care spend­ing in­creased less rapidly in 2013, ris­ing 3.4%, com­pared with 4% the prior year. The Af­ford­able Care Act cuts, which re­duce rate in­creases to providers, be­gan in 2011 and con­tinue through 2019. In ad­di­tion, the bud­get se­ques­tra­tion cuts re­duced what Medi­care pays hos­pi­tals, doc­tors and other providers by 2%.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.