Fix Health Care Policy

Health Spending Down—Because People Are Avoiding Care

The Office of the Actuary at the Centers for Medicare and Medicaid Services (CMS) recently published its annual estimate of U.S. health spending in the journal Health Affairs. The report shows that growth in health spending remained slow in 2010. Medical expenditures grew at an annual rate of 3.9 percent, up just 0.1 percent from 2009. However, the slow growth doesn’t represent a decrease in health care costs, but a reduction in utilization and intensity of medicine. People are choosing the less costly alternative of avoiding the doctor and not taking expensive prescription drugs.

The report primarily attributes the slow growth to effects of the recent recession:

Including the highest unemployment rate in twenty-seven years, a substantial loss of private health insurance coverage, employers’ increased caution about hiring and investing during the recovery, and the lowest median inflation adjusted household income since 1996.

Despite CMS’s and other health economists’ conclusion that the recession led to slow health spending growth, the Obama Administration published a blog stating that Obamacare is responsible, with no mention of the recession. Nancy-Ann DeParle, Assistant to the President and Deputy Chief of Staff, wrote that “(These numbers) do show why the Affordable Care Act is so important. And we’re confident the law will continue to help hold down cost growth in the years ahead.”  (Read the rest on The Foundry…)

Tags: CMS, health care spending, Medicare, ObamaCare, prescription drugs, repeal the law, utilization