A new CMS study out in the journal Health Affairs today confirms yet again that health care spending growth in the US is at historic lows. And this growth is across all parts of the system from Medicaid (yes, Medicaid) where growth is also at historic lows to private health insurance growth:
For the fourth consecutive year, growth in health care spending remained low, increasing by 3.7 percent in 2012 to $2.8 trillion. At the same time, the share of the economy devoted to health fell slightly (from 17.3 percent to 17.2 percent) as the nominal gross domestic product (GDP) grew by 4.6 percent. Faster growth in hospital services and in physician and clinical services was mitigated by slower growth in prices for prescription drugs and nursing home services. Despite an uptick in enrollment growth, Medicare spending growth slowed slightly in 2012, mainly due to lower payment updates. For Medicaid, slowing enrollment growth kept spending growth near historic lows. Growth in private health insurance spending also remained near historically low rates in 2012, largely influenced by the nation’s modest economic recovery and its impact on enrollment.
These are simply facts. At no other period in the last half century have health costs grown so slowly. None. Already last month the Congressional Budget Office is projecting such lower health costs in the future that our national budget outlook is substantially improved.
Every year for the last four I’ve been writing about how health costs are decreasing much more slowly that they ever have and every year naysayers have piled on saying, essentially, “this can’t continue.” Well, it is continuing. There isn’t a magic bullet out there driving this reduction either. It’s a combination of more cost sharing, changes in how we pay doctors and hospitals through Medicare and put in place by the Affordable Care Act, and a willingness on the part of major providers to tackle the tough cost issues.