The Curve Bends?

Brian Beutler points to a recent study showing that the slowdown in healthcare spending we have seen over the past few years could stick:

The study by Harvard researchers, featured in the latest edition of Health Affairs, finds, like all studies of this nature, that the recession and weak economy contributed significantly to the spending growth slowdown. Less generous benefits, resulting in higher out-of-pocket costs, accounted for 20 percent of it. Faced with less generous coverage and less disposable income, people consumed fewer health services.

But the good news is that spending growth also slowed among those whose health benefits haven’t changed, including Medicare patients. And that suggests a more enduring trend. “Our findings suggest cautious optimism that the slowdown in the growth of health spending may persist — a change that, if borne out, could have a major impact on US health spending projections and fiscal challenges facing the country,” the authors write.

Walter Russell Mead likes what he’s seeing:

[W]e’re entering an era where medical tech developments are more about data collection and streamlined service delivery. This kind of tech is one of the best hopes we have of bringing health care costs down. These studies are an early sign that this tech may be living up to its promise.

The study also makes another important point: increased out-of-pocket spending is driving health care consumption down. When third parties bear the cost of care, patients have little incentive to bring market discipline to the health care sector. When patients have to bear more of the cost themselves, they’re more likely to limit their consumption of care. It’s too early to tell whether the slowdown in health care spending will continue, but the structural changes these studies point to are encouraging.