The Joplin Globe, Joplin, MO

Business

January 7, 2013

Unusual respite from surging health care costs

WASHINGTON — Americans kept health care spending in check for three years in a row, the government reported Monday, an unusual respite that could linger if the economy stays soft or fade like a mirage if job growth comes roaring back.

The nation’s health care tab stood at $2.7 trillion in 2011, the latest year available, said nonpartisan number crunchers with the Department of Health and Human Services. That’s 17.9 percent of the economy, which averages out to $8,680 for every man, woman and child, far more than any other economically advanced country spends.

Still, it was the third straight year of historically low increases in the United States. The 3.9 percent increase meant that health care costs grew in line with the overall economy in 2011 instead of surging ahead as they normally have during a recovery. A health care bill that grows at about the same rate as the economy is affordable; one that surges ahead is not.

The respite means President Barack Obama and lawmakers in Congress have a window to ease in tighter cost controls this year, if they can manage to reach a broader agreement on taxes and spending. Health care spending is projected to spike up again in 2014, as Obama’s law covering the uninsured takes full effect, before settling down to a new normal.

“Economic, income and job growth in 2011 was modest and less than might normally be expected during an economic recovery,” said the report from the government’s National Health Expenditure Accounts Team. “This fact raises questions about whether the near future will hold the type of rebound in health care spending typically seen a few years after a downturn.”

The report noted signals in both directions.

Medicare spending grew faster in 2011, but Medicaid spending slowed down. Spending on hospital care slowed.

Spending on prescription drugs and doctors’ services accelerated, but spending for private health insurance grew modestly.

More people gained health insurance as a result of the health law’s requirement that young adults can stay on a parent’s plan until age 26. But employers increasingly steered workers and families into high-deductible health plans, which come with lower monthly premiums but require patients to pay a greater share of their bills out of their own pockets. That’s a disincentive to go to the doctor.

Although some insurers are currently seeking big premium increases for certain plans, it’s not clear that’s a widespread trend.

The slowdown in health care spending has been widely debated. Some experts see it as an echo-chamber effect of a weak economy. Others say cost controls by government and employers are starting to have an effect. Many believe costs need to be squeezed more.

“I think it’s a big opening,” said Ken Thorpe, a professor of health policy at Emory University in Atlanta, who served in the Clinton administration as a senior adviser. “If we have a debate on entitlement reform this year, we need to come up with ideas for pulling costs out of the system.”

Cutting payments to hospitals and doctors won’t solve the problem, said Thorpe. The challenge is to slow the spread of chronic illnesses such as diabetes while also finding ways to keep patients healthier and out of the hospital.

The numbers back up Thorpe’s observation. Health care spending is highly skewed toward the sickest people. Five percent of patients account for nearly half the total spending in any given year.

 

1
Text Only
Business
  • Express Scripts expansion could mean 1,500 jobs

    The nation’s largest company that manages pharmacy benefits is opening a new office building in St. Louis County as part of an expansion expected to add 1,500 jobs over the next few years.

    July 28, 2014

  • 5 things to know about coal trade, global warming

    As the Obama administration weans the U.S. off polluting fuels blamed for global warming, energy companies have been sending more of America’s unwanted energy leftovers to other parts of the world where they could create even more pollution.

    July 28, 2014

  • US rig count up 12 to 1,883

    Oilfield services company Baker Hughes Inc. says the number of rigs exploring for oil and natural gas in the U.S. rose 12 this week to 1,883.

    July 25, 2014

  • Business Visa, Amazon pull stock market lower

    Disappointing news on the American consumer, reflected in the results of retail giant Amazon and credit card processor Visa, dragged down the stock market Friday, putting two major indexes on course for a weekly loss.

    July 25, 2014 1 Photo

  • Aviations Bad Week.jpg Very bad week: Airline disasters come in a cluster

    Nearly 300 passengers perish when their plane is shot out of the sky. Airlines suspend flights to Israel’s largest airport after rocket attacks.

    July 24, 2014 1 Photo

  • Dave Ramsey: Keep hands off the 529 money

    Should we use money from our son's 529 plan for college to pay off debt?

    July 24, 2014

  • New Jersey sues over Florida pizza shop logo

    The New Jersey Turnpike Authority wants a Florida pizza shop to pay a big toll for using a logo similar to the Garden State Parkway’s green and yellow signs.

    July 24, 2014

  • Laclede Group gets nod to buy Alabama company

    The Alabama Public Service Commission this week voted to approve the acquisition of Alabama Gas Corp. by The Laclede Group from Energen Corp.

    July 24, 2014

  • France: Air Algerie flight vanishes over N Mali

    An Air Algerie flight carrying 116 people from Burkina Faso to Algeria’s capital disappeared from radar early Thursday over northern Mali after heavy rains were reported, according to the plane’s owner and government officials in France and Burkina Faso.

    July 24, 2014

  • Business US stocks rise as investors weigh earnings

    Stocks mostly rose in early trading Thursday as several big companies across industries reported second-quarter earnings, including Facebook, Ford and equipment maker Caterpillar.

    July 24, 2014 1 Photo

Poll

A new provision by the U.S. Department of Agriculture allows qualifying districts with high percentages of students on food assistance to allow all students to eat free breakfasts and lunches. Would you agree with this provision?

Yes
No
     View Results
Facebook
Twitter Updates
Follow us on twitter
NDN Video
Kerry: Humanitarian Cease-fire Efforts Continue Raw: Corruption Trial Begins for Former Va Gov. The Carbon Trap: US Exports Global Warming UN Security Council Calls for Gaza Cease-fire Traditional African Dishes Teach Healthy Eating 13 Struck by Lightning on Calif. Beach Baseball Hall of Famers Inducted Israel, Hamas Trade Fire Despite Truce in Gaza Italy's Nibali Set to Win First Tour De France Raw: Shipwrecked Concordia Completes Last Voyage Raw: Sea Turtle Hatchlings Emerge From Nest Raw: Massive Dust Storm Covers Phoenix 12-hour Cease-fire in Gaza Fighting Begins Raw: Bolivian Dancers Attempt to Break Record Raw: Israel, Palestine Supporters Rally in US Raw: Air Algerie Flight 5017 Wreckage Virginia Governor Tours Tornado Aftermath Judge Faces Heat Over Offer to Help Migrant Kids Kangaroo Goes Missing in Oklahoma More M17 Bodies Return, Sanctions on Russia Grow