Economy, not ACA, caused healthcare spending slowdown

The recent slowdown in healthcare spending is likely due to economic factors rather than the implementation of the Affordable Care Act (ACA), according to a new study in Health Affairs.

Researchers, led by David Dranove of Northwestern University's Kellogg School of Management, analyzed Health Care Cost Institute (HCCI) data from 2007 to 2011, restricting their data to people between the ages of 26 and 64.

They found that healthcare spending increases were smallest for insured people living in areas hit hardest by the economic downturn, such as Birmingham, Alabama and Las Vegas, which experienced a little more than 7 and 5 percent growth in healthcare spending, respectively, between 2007 and 2011. Comparatively, Trenton, New Jersey and Dallas, which were not hit as hard by the recession, saw healthcare spending increases of 29 and 28 percent, respectively.

Dranove and his team performed additional analysis to confirm the geographical differences in spending were not the culmination of unrelated, longer-term trends beginning prior to the recession. Furthermore, since their data reflects numbers among employed people, who may have been largely sheltered from the recession's fallout, the study results may underestimate the economy's broader effect on healthcare spending.

"However, it is important to note that our findings do not automatically imply that spending will increase at a faster pace as the economy recovers, because the ACA (or other new factors) may offset future growth," the authors add.

A July report by the White House Bureau of Economic Analysis found a slowdown in healthcare spending contributed to a 0.2 percent drop in gross domestic product during the first quarter of the year. Data from the previous month similarly found slow growth, despite expectations that economic recovery and expanded health coverage would quicken its pace, FierceHealthFinance previously reported.

To learn more:
- read the study abstract