Economy Less of a Factor in Slow Growth for Healthcare Spending, New Studies Say

The recession's drag on health spending did not fully explain the recent record slow growth in health spending, according to the latest studies that aim to identify what, if anything, suggests the slowdown may last.

The papers, published in the journal Health Affairs, will be welcome news to those looking for signals that payment and delivery forms are beginning to have an effect on spending, although the researchers stop short of saying so.

The research points to a smaller role for the economy than other recent attempts to pinpoint what was behind three consecutive years of record slow growth in U.S. health spending. Authors of the new papers say there is reason to believe that as the economy recovers, health spending won't rebound to the pace that has absorbed workers' raises, pushed households into bankruptcy and left lawmakers and businesses struggling to absorb increased costs.

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Source: Modern Healthcare

One paper found the economy accounted for roughly one-third, or 37%, of the slowdown, while cuts to Medicare and a decline in privately insured patients accounted for another 8%. “The evidence is at least as strong that it's structural as it is cyclical,” said David Cutler, a healthcare economist and professor at Harvard University who co-authored the paper.