Recalculating Health Care Spending Projections

By Claire Thayer, May 22, 2013

A new study published in the May 2013 issue of the journal Health Affairs projects that health care spending during the next 10 years will actually be as much as $770 billion below predictions. Here's an abstract from this article.

Despite earlier forecasts to the contrary, US health care spending growth has slowed in the past four years, continuing a trend that began in the early 2000s. In this article we attempt to identify why US health care spending growth has slowed, and we explore the spending implications if the trend continues for the next decade. We find that the 2007–09 recession, a one-time event, accounted for 37 percent of the slowdown between 2003 and 2012. A decline in private insurance coverage and cuts to some Medicare payment rates accounted for another 8 percent of the slowdown, leaving 55 percent of the spending slowdown unexplained. We conclude that a host of fundamental changes—including less rapid development of imaging technology and new pharmaceuticals, increased patient cost sharing, and greater provider efficiency—were responsible for the majority of the slowdown in spending growth. If these trends continue during 2013–22, public-sector health care spending will be as much as $770 billion less than predicted. Such lower levels of spending would have an enormous impact on the US economy and on government and household finances.

More info:

If Slow Rate Of Health Care Spending Growth Persists, Projections May Be Off By $770 Billion. David M. Cutler and Nikhil R. Sahni. content.healthaffairs.org/content/32/5/841.abstract?=right

To view the Table of Contents of the current issue: content.healthaffairs.org/content/current