July 16th, 2013
In the May issue of Health Affairs, two teams of Harvard researchers asserted that the recent slowdown in health care spending could be the beginning of a trend that will lead to decreased health care costs. Their optimism is sharply at odds with the bleaker assessments contained in a recent Kaiser Family Foundation analysis, a related commentary from KFF President Drew Altman, and an NEJM Perspective by Stanford University economist Victor Fuchs.
Resolving the question of whether or not the United States has finally gotten a handle on health care spending is vitally important, because the choices we make going forward will have profound implications for our economy, the financial wellbeing of millions of American families, and ultimately America’s standing in the world.
Whether steep growth of health spending resumes or not, the amount of money we already devote to health care is so huge — roughly $2.8 trillion per year — that it is crowding out other national and state priorities. In addition to fueling our national debt, the last 12 years of spending growth wiped out the income gains of middle class families. If health care had grown at the same rate as the consumer price index, a typical middle class family of four would have had an extra $6,000 to spend in 2011 alone. But because this income was consumed by our health care, it was not available for other family priorities such as housing, education, and child care.
The spending predictions reported to date are so divergent that it seems who is reading the tea leaves matters as much as the pattern left on the bottom of the cup. But regardless of which view you favor, it is likely that the ultimate trajectory will be determined by four forces that are moving inexorably, like tectonic plates, to shape the future landscape of American health care.Read the rest of this entry »