In 2013, U.S. health care spending grew by 3.6 percent, the lowest growth rate the sector has experienced since the government first began measuring it in 1960. That marks the fifth successive year that national spending on health care grew at a historically low rate. The NYT reports on the possible causes:
Among factors restraining the growth of health spending, the administration pointed to new limits on Medicare payments to hospitals and health maintenance organizations; automatic across-the-board cuts in federal spending required by a 2011 law; and the proliferation of high-deductible health insurance plans, which tend to discourage the use of care by requiring consumers to pay more of the cost. […]
The civil servants who wrote the report said some provisions of the law “exerted downward pressure” on health spending while others “exerted upward pressure.”
“The key question is whether health spending growth will accelerate once economic conditions improve significantly,” the report said. “Historical evidence suggests that it will.”
There are three things to note about this trend. First, whatever the exact mix of causes is, it’s certainly much more complex than “the ACA did it.” The lingering recession, the rise in high deductible plans, and other structural changes are as much responsible (or more) as anything required by the ACA—though it is notable that the main way the ACA may have contributed to the slowdown, according to this piece, is by making cuts to entitlement programs. Second, the rise in high deductible plans contributing to the slowdown is in some ways good news. Over-consumption of health care is a driver of costs in the U.S. system, and if high deductible plans are becoming a norm, that should help counteract some perverse incentives introduced by comprehensive insurance.
Third, however, this news does not represent an unqualified good. The decreasing consumption of care is welcome when the person cutting back really doesn’t need the services he or she would otherwise have consumed—a common occurrence. But the pressure to avoid care also falls on people who really do need more care then they can afford and who will incur even larger bills for putting off that visit to the doctor. Even as spending is slowing down nationally, individuals are feeling greater financial burden and acquiring more medical debt. More Americans are putting off care than any time in the past fourteen years, and some of them certainly need the care they are forgoing. Cuts to Medicare often mean doctors are less willing to see Medicare patients. We are saving money on health care but not in a way that seems to benefiting the American population as much as you’d expect. For many, this is austerity masquerading as affordability.