Health Spending Growth Ramps Up to Pre-Recession Levels
APRIL 9, 2014
ANN ARBOR, MI.—National Health Expenditures (NHE) in February 2014 grew 6.7% over February 2013, the highest rate since March 2007, just prior to the recession, which officially began in December 2007. While governmental data attribute a portion of the growth in January and February 2014 to newly insured individuals under the Affordable Care Act, much of the acceleration in growth occurred during 2013, prior to ACA’s expanded coverage. Growth during the first quarter of 2013 was less than 4% but, by the fourth quarter, it had risen to 5.3%. The health spending share of GDP reached an all-time high of 17.7% in January, the most recent month for which GDP data are available.
These data come from the monthly Health Sector Economic IndicatorsSM briefs released by Altarum Institute’s Center for Sustainable Health Spending.
“The acceleration in health spending growth during 2013 suggests that the long, slow downward effects of the recession on health spending have finally run their course,” said Charles Roehrig, director of the Center. “Since health care price growth remains historically low, the acceleration in spending seems to be driven primarily by utilization, though we have yet to see corroborating evidence.”
via Health Spending Growth Ramps Up to Pre-Recession Levels | Altarum Institute.
At the same time inflation over the same period was up about 0.9% based on the CPI-W which is used in the Social Security COLA calculation. That means health care spending has increased 7.4 times the rate of general inflation. What happened to the trend toward lower growth in health care costs? I’d ask Secretary Sibelius about all the positive effects of Obamacare on cost trends, but she has moved on to more realistic endeavors.
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