Studies: Economy only partly responsible for slowed health spending

The recession was only partly responsible for a slowdown in annual healthcare cost increases between 2009 and 2011, suggesting the deceleration could continue, a new study published in the journal Health Affairs found.

The study looked at job losses resulting in loss of health insurance and changes in insurance benefits that shifted more costs to patients, concluding changes in benefits accounted for about 20 percent of the decreased rate of cost growth.

"However, we also observed a slowdown in spending growth even when we held benefit generosity constant, which suggests that other factors, such as a reduction in the rate of introduction of new technology, were also at work," according to the study abstract.

The authors expressed "cautious optimism" that the slowdown in healthcare spending growth could persist.

If that's the case, a second study published in Health Affairs concluded, public healthcare spending could drop over the next 10 years by as much as $770 billion below predictions.

That study found the recession accounted for 37 percent of the slowdown in spending growth between 2003 and 2012, and that cuts to private insurance coverage and Medicare payment rates accounted for another 8 percent.

"We conclude that a host of fundamental changes--including less rapid development of imaging technology and new pharmaceuticals, increased patient cost sharing, and greater provider efficiency--were responsible for the majority of the slowdown in spending growth," the authors said in the study abstract.

"If they're right, and the trend continues, it means workers can expect higher wages and the country's projected medium term deficits are significantly overstated, which in turn suggests lawmakers' continuing obsession with the current budget deficit, and deficits over the coming decade, are misguided," senior congressional reporter Brian Beutler wrote in his Talking Points Memo blog.

To learn more:
- read the cost study abstract
- check out the spending study abstract
- here's Beutler's blog post