HC Statistics Health Reform

Is the US health care spending slowdown real?

Between 2000 and 2007 annual health expenditures in the US grew by 6.6% per year. Between 2008 and 2011, however, the growth rate was only 3.3 percent per year. Are structural changes (e.g., the ACA) helping cause the slowdown?

According to Dranove et al. (2014), the answer is likely ‘no’. The authors use new data from the Health Care Cost Initiative (HCCI) which collects claims data from insurance companies such as Aetna, Humana, and UnitedHealthcare. Economic forces rather than structural changes in the healthcare system have lead to decelerating health care spending.

By exploiting regional variations in the severity of the slowdown, we determined that the economic slowdown explained approximately 70 percent of the slowdown in health spending growth for the people in our sample. This suggests that the recent decline is not primarily the result of structural changes in the health sector or of components of the Affordable Care Act, and that—absent other changes in the health care system—an economic recovery will result in increased health spending.


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