Healthcare spending trend $2.6 trillion below original projections

Calculator and pen sit on top of a spreadsheet of figures.

The passage of the Affordable Care Act (ACA) has partly led to a huge slowdown in U.S. healthcare spending, according to a new report by the Robert Wood Johnson Foundation and the Urban Institute.

The study concluded that the U.S. could spend $2.6 trillion less on healthcare services for much of this decade than originally projected prior to the passage of the ACA.

“There are many potential drivers of the recent slowdown in spending growth rates, and no one can be sure how MACRA may impact spending going forward,” said Kathy Hempstead of the Robert Wood Johnson Foundation in a statement emailed to FierceHealthFinance. “If this healthcare spending growth slowdown continues, spending will be trillions less before the end of the decade."

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Recent snapshots suggest that healthcare spending is continuing to maintain a slow pace. Data from the Altarum Institute concluded that spending had moderated during the first quarter of 2016 compared to a year before.

But the ACA is not entirely the source for the slowdown. “A critical factor in the reduced spending projections...was the historic slowdown in health spending growth that began in 2008,” the report said, which was attributed to the Great Recession. The report noted that the annual spending increase averaged 3.6 percent from 2010 to 2013, down from the 5.4 percent that originally had been forecast.

Medicaid spending increase projections between 2014 and 2019 are now 23 percent lower than originally estimated; and Medicare is 9.6 percent lower, according to the report. The Medicaid drop is partly attributed to the decision of some states not to expand eligibility, according to the report.

Although the decision not to expand Medicaid in some states has had a positive impact on national healthcare expenditures, it has created severe financial duress in Mississippi and other non-expansion states.

- read the report (.pdf)


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