The State of Healthcare Today: 8 Thougths

Here are eight thoughts on the state of healthcare in the United States today.

1. The existing slow down in growth of healthcare inflation and spending is largely due to the slow growth of the U.S. economy. CMS recently released a report, which found that in 2012, national health spending growth remained slow for the fourth consecutive year. According to the report, which was published in Health Affairs, national health spending in 2012 increased by 3.7 percent to $2.8 trillion, compared with a 3.6 percent increase to $2.7 trillion in 2011. Since 2009, annual growth in national health spending has remained between 3.6 percent and 3.8 percent, which is lower than years prior. In 2007, for example, the annual growth rate for healthcare came in at 7.6 percent.

Spending growth in 2012, compared to 2011, was just 0.4 percentage points higher, which represents the lowest rate increase since 1960 — a point the White House was quick to tout. Despite the White House's attempts to tie the slow down to the Patient Protection and Affordable Care Act — a news release by the Obama Administration says "The Affordable Care Act, for the first time in decades, has helped to stop that trend" — CMS analysts found the law had little effect on growth rates. Instead, the authors argue the growth reflects the reverberating effects of the economic woes that began in 2008. According to the CMS report:

"This pattern [of slowing growth] is consistent with historical experience when health spending as a share of GDP often stabilizes approximately two to three years after the end of a recession and then increases when the economy significantly improves. Recently, however, the question has arisen about whether a more fundamental change is occurring within the health sector and whether this stability will endure. From our perspective, more historical evidence is needed before concluding that we have observed a structural break in the historical relationship between the health sector and the overall economy."

Read the full report on Becker's Hospital Review.

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