Health Care Spending Slows: A Good Sign?

By Meg Reid, Undergraduate Research Fellow, January 16, 2012 at 2:00 pm

The big news in health care policy recently is that health care spending growth slowed through the end of the decade. Spending rose 3.8% in 2009 and 3.9% in 2010—still faster than the economy, but these two years saw the slowest growth in half a century. MinnPost reports that average spending per household in the Twin Cities metro fell from $3,834 in 2007 to $3,354 in 2008 to $3,314 in 2009.

The Affordable Care Act did little to contribute to slowed growth, with only 0.1% of the growth rate attributed to the reform. This is not particularly surprising, however, as much of the bill has yet to be implemented. The ACA has done more to shift payments around than to contribute to or reduce spending.

Despite what the White House is saying, the slow in health care spending might not be “good news.” The reduction of spending is caused less by system reform or better money management, and more because people had less to spend on care and were less likely to be insured. Fewer working-age Minnesotans have insurance through employers—the rate dropped from 81% to 71% in just two years.

When money is tight, we may be forced to skimp on care and medications. Hospitals saw fewer admissions, people made fewer visits to the doctor, and growth in emergency room and outpatient visits slowed. We can attribute the low growth rate in small part to frugal spending and a reduction in unnecessary care, but Minnesotans are also forgoing the care that they need. Though money may be saved in the short term, postponing care can mean more costly services later when health issues come back to bite us.

When we consider the trends in health care spending, we need to be wary that reduced spending isn’t necessarily a positive sign. Only when slowed spending is accompanied by better health outcomes should we celebrate.

Posted in Health Care | Related Topics: Health Care Reform 

1 Comment

Yi Li You says:

January 19, 2012 at 8:36 am

  That may mean many people cannot get access to health care due to cut of EMA and other program coverage, like: portico, etc.

It means there are many potential risks for these uninsured patients: they cannot get medical care for their medical conditions. This will put great risks for their health, they may end up in E.R. for more severe episodes of their medical conditions.

I don’t understand why legislators not listening to any suggestions for Medicaid reform: reduce its waste and keep necessary coverage?

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