Healthcare spending trends are continuing along their historic lows, according to data from the Altarum Institute, while prices are also near similar levels.
During the month of June, healthcare spending was up 5.7 percent compared to a year ago. However, that is a far slower growth rate than the 6.7 percent rate reported during the first quarter of the year, which represented an eight-year high. Overall, Altarum estimated that healthcare spending grew at a 6.3 percent annual rate during the first half of 2015.
"Although the second quarter data are preliminary, these numbers together suggest that the moderation in health spending growth observed so far this year will continue through the second half of the year," the report said.
Hospitals were the biggest factor in overall healthcare spending, representing 32 percent of the total spending. Over the past year, hospital spending grew at a 6.3 percent annual rate, compared to 5.4 percent annual growth rate in June 2014. However, that was outstripped by spending on prescription drugs, which grew at a 9.4 percent annual rate, although that was down from the 13.9 percent annual growth rate reported in June 2014.
Economics have been split over long-term spending trends, with some saying that the additional of millions more insured under the Affordable Care Act will drive up spending. However, the Urban Institute has projected that spending could be entering a long-term downturn.
Meanwhile, prices have barely budged, at 1.1 percent higher than compared to June 2014. Hospital prices were up just 0.7 percent year-over-year. But prices for physician and clinical services dropped 1.2 percent compared to June 2014, and it's the steepest drop Altarum has seen since it began keeping records in 1990. Non-durable medical product prices also dropped 1.6 percent. But pharmaceutical prices were up 4.8 percent, although that is lower than the 5.3 percent price trend increase reported in May.
"June healthcare prices across all services are down for Medicare and Medicaid but up for private payers," said Altarum Director Charles Roehrig in a statement. "This new Bureau of Labor Statistics price index tells us that the already large gap between what private and public insurers pay for the identical service is getting larger. This has obvious potential implications for patients and providers and we plan to track it closely."
To learn more:
- read the Altarum spending report (.pdf)
- check out the Altarum pricing report (.pdf)
- here's the Altarum statement