Spending Growth Trends: Keeping An Eye On Spending Per Person

New health spending data for 2014 and spending projections over the next decade from the Centers for Medicare and Medicaid Services (CMS) Office of the Actuary were just published in Health Affairs. They show that total growth in health spending picked up in 2014; this was expected given the significant expansion of insurance coverage and the release of expensive new drugs for hepatitis C.¹ But all of the evidence points to continued modest growth in per capita/enrollee spending. This low growth in per enrollee costs is a strong signal that we may be in an era where the “new normal” is more restrained growth in the use of health care services, even as the economic recovery continues and rates of uninsurance decline. What Are The Estimates? In brief, the Office of the Actuary estimates that national health spending growth in 2014 returned to a rate of over 5 percent, a growth rate not seen since 2007. However, their longer-term health care spending growth projections continue to be pegged at 1.1 percentage points faster than economic growth, a rate well below the historical average. In addition, 2014 growth per capita remained below 5 percent, even without accounting for the aging of the population. That’s considerably lower than the historic average of over 7 percent. Keeping age-adjusted per capita growth in line with overall economic growth is the holy grail of health cost control: when the spending growth rate rises above the overall rate of growth in the economy it...
Source: Health Affairs Blog - Category: Health Management Authors: Tags: Costs and Spending Drugs and Medical Technology Featured Health Professionals Hospitals Insurance and Coverage Medicaid and CHIP Medicare Altarum symposium CMS Office of the Actuary Consumers Health IT Melinda Buntin transparency Source Type: blogs