Eric Morath calls attention to the first time that the medical cost index has posted a monthly decline since 1975:
The effects of the federal health care overhaul — the Affordable Care Act that passed in 2010 —and constrained government payments to doctors and hospitals seems to be trickling down to consumers, both those directly purchasing insurance plans and those buying drugs and treatments. “The slowing of healthcare inflation right now seems to be driven by onset of new policies,” said Alec Phillips, a Goldman Sachs economist who follows health care trends. “That is probably going to be a temporary factor.” In the coming year, the next phase of the health care overhaul will expand coverage and increase subsidy payments and could, in turn, push medical costs back up, Mr. Phillips said.
Drum throws cold water:
[M]edical inflation has been outrunning overall inflation by about 1.5 percentage points ever since the 1950s, and, roughly speaking, that’s still the case. There’s been a bit of a slowdown over the past decade, but only a bit.
Laurie McGinley examines a report that “concludes that if present trends continue Medicare savings will be $1 trillion more in the next 10 years than the savings projected by the Congressional Budget Office in May”:
The changes, Al Dobson said in an interview, are the result of marketplace pressures and the Affordable Care Act, which set new penalties for hospital readmissions, and included bundled payments and other incentives for hospitals and doctors to find ways to cut costs without hurting patients.
But why assume present trends will continue? For one thing, won’t the aging of the Baby Boomers drive up Medicare spending? The answer Dobson argues, is counter-intuitive: At least for the next several years, Baby Boomers will be the youngest people on Medicare, a positive trend, cost-wise. That gives the nation a “respite,” he contends, to figure out how to handle needed entitlements changes. “We have 10 years to figure this baby out,” he says. “If we don’t, it could be pretty messy.”
Tim Fernholz, meanwhile, profiles a firm that thinks keeping healthcare costs in check could be as simple as a little more transparency:
Castlight [is] a big data firm that launched a service to help big employers, from companies like Safeway to the state of Indiana, cut health insurance costs. Castlight uses each employer’s historical data on insurance claims and payments to develop price and quality comparisons for local health-care providers, from physicians to pharmacists. That data is provided to people on the insurance plan, who use web and mobile apps to find the best combination of cost and quality for their needs. That can mean big savings if the cost of a procedure like a colonoscopy varies by as much as a factor of seven. Right now, 4 million people use Castlight’s service, and the company is set to grow. But it can do better, according to its CEO and co-founder, Dr. Giovanni Colella, if it gets more data from the government.
The Dish 