What’s responsible for the slowdown in healthcare spending?

The May issue of the journal Health Affairs focused on the recent slowdown in healthcare spending. These spending data, which were released by the government earlier this year, showed that between 2009 and 2011 healthcare expenditures increased about 3% annually, in contrast to the average 5.9% growth we experienced in the previous 10 years.

Slower spending growth is always good news, but at this point, we don’t know whether the spending slowdown is permanent or merely a blip. Several factors could be responsible for the reduced spending growth, including the recession and accompanying job losses as well as changes to employer-sponsored health plans that shifted more costs onto employees. One analysis, however, attributed rising employee out-of-pocket costs to only a fraction of the decrease in the growth rate.

That begs the question: what other factors might have been responsible for slowing down U.S. healthcare spending? Could it be that doctors and hospitals are transforming the way they deliver care? For the past few years, the term “value” has crept into healthcare discussions, creating fundamental changes in the care we provide to patients. We have started taking a closer look at outcomes. We are conducting more comparative- effectiveness research. Patient-centered care has entered our vocabulary, and we are getting better at involving patients in their treatments. These efforts collectively have slowed healthcare spending by nearly 3%.

Authors David Cutler and Nikhil Sahni assert that if we continue on this path for the next 10 years, healthcare spending in the public sector could be $770 billion less than predicted. Can you imagine the effect this will have on our economy?

Topics: Hayes Blog

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