Health care cost growth stays lean

  • Associated Press
  • Monday, January 7, 2013 3:52pm
  • Business

Americans kept health care spending in check for three years in a row, the government reported Monday, an unusual respite that could linger if the economy stays soft or fade like a mirage if job growth comes roaring back.

The nation’s health care tab stood at $2.7 trillion in 2011, the latest year available, said nonpartisan number crunchers with the Department of Health and Human Services. That’s 17.9 percent of the economy, which averages out to $8,680 for every man, woman and child, far more than any other economically advanced country spends.

Still, it was the third straight year of historically low increases in the United States. The 3.9 percent increase meant that health care costs grew in line with the overall economy in 2011 instead of surging ahead as they normally have during a recovery. A health care bill that grows at about the same rate as the economy is affordable; one that surges ahead is not.

The respite means President Barack Obama and lawmakers in Congress have a window to ease in tighter cost controls this year, if they can manage to reach a broader agreement on taxes and spending. Health care spending is projected to spike up again in 2014, as Obama’s law covering the uninsured takes full effect, before settling down to a new normal.

The report noted signals in both directions.

Medicare spending grew faster in 2011, but Medicaid spending slowed down. Spending on hospital care slowed.

Spending on prescription drugs and doctors’ services accelerated, but spending for private health insurance grew modestly.

More people gained health insurance as a result of the health law’s requirement that young adults can stay on a parent’s plan until age 26.

But employers increasingly steered workers and families into high-deductible health plans, which come with lower monthly premiums but require patients to pay a greater share of their bills out of their own pockets. That’s a disincentive to go to the doctor.

Although some insurers are currently seeking big premium increases for certain plans, it’s not clear that’s a widespread trend.

The slowdown in health care spending has been widely debated. Some experts see it as an echo-chamber effect of a weak economy. Others say cost controls by government and employers are starting to have an effect. Many believe costs need to be squeezed more.

“I think it’s a big opening,” said Ken Thorpe, a professor of health policy at Emory University in Atlanta, who served in the Clinton administration as a senior adviser. “If we have a debate on entitlement reform this year, we need to come up with ideas for pulling costs out of the system.”

Cutting payments to hospitals and doctors won’t solve the problem, said Thorpe. The challenge is to slow the spread of chronic illnesses such as diabetes while also finding ways to keep patients healthier and out of the hospital.

The numbers back up Thorpe’s observation. Health care spending is highly skewed toward the sickest people. Five percent of patients account for nearly half the total spending in any given year.

The report was published in the journal Health Affairs.

———

Online:

http://content.healthaffairs.org/content/32/1/87.full

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

A closing sign hangs above the entrance of the Big Lots at Evergreen and Madison on Monday, July 22, 2024, in Everett, Washington. (Ryan Berry / The Herald)
Big Lots announces it will shutter Everett and Lynnwood stores

The Marysville store will remain open for now. The retailer reported declining sales in the first quarter of the year.

The Safeway store at 4128 Rucker Ave., on Wednesday, Nov. 29, 2023, in Everett, Washington. (Mike Henneke / The Herald)
Kroger and Albertsons plan to sell these 19 Snohomish County grocers

On Tuesday, the grocery chains released a list of stores included in a deal to avoid anti-competition concerns amid a planned merger.

Helion Energy CEO and co-founder David Kirtley talks to Governor Jay Inslee about Trenta, Helion's 6th fusion prototype, during a tour of their facility on Tuesday, July 9, 2024 in Everett, Washington. (Olivia Vanni / The Herald)
Inslee energized from visit to Everett fusion firms

Helion Energy and Zap Energy offered state officials a tour of their plants. Both are on a quest to generate carbon-free electricity from fusion.

Awards honor employers who promote workers with disabilities

Nominations are due July 31 for the awards from the Governor’s Committee on Disability Issues and Employment.

Bruce Hallenbeck, 4, picks out Honeycrisp apples for his family at Swans Trail Farms on Wednesday, Oct. 26, 2022 in Snohomish, Washington. The farm is now closed for the season. (Olivia Vanni / The Herald)
Study: Washington residents would pay more for homegrown goods

Local online shoppers are on the look out for the made in Washington label.

Aurora Echo, owner of Wildly Beloved Foods, begins making cavatelli pasta with one of her Bottene pasta machine on Thursday, June 27, 2024 in Clinton, Washington. (Olivia Vanni / The Herald)
Whidbey artisanal pasta maker shares her secrets

For Aurora Echo of Wildly Beloved Foods in Clinton, “sharing food is so ancient; it feels so good.”

Lynnwood
New Jersey auto group purchases Lynnwood Lexus dealership land

Holman, which owns Lexus of Seattle in Lynnwood, bought property on which the dealership resides.

Two couples walk along Hewitt Avenue around lunchtime on Wednesday, Oct. 19, 2022 in Lynnwood, Washington. (Olivia Vanni / The Herald)
Everett businesses say it’s time the city had its own Chamber of Commerce

The state’s seventh-largest city hasn’t had a chamber since 2011. After 13 years, businesses are rallying for its return.

Students Mary Chapman, left, and Nano Portugal, right, work together with a fusion splicer and other equipment during a fiber optic technician training demonstration at Sno-Isle TECH Skills Center on Tuesday, May 28, 2024, in Everett, Washington. (Ryan Berry / The Herald)
Sno-Isle students on the path to becoming fiber professionals

The state will roll out $1.2 billion to close gaps in internet access. But not enough professionals are working to build the infrastructure.

Washingtonians lost $250M to scammers in 2023

Identity theft, imposter scams and phony online ads were the most common schemes, a new study says.

LETI founder and president Rosario Reyes, left, and LETI director of operations Thomas Laing III, right, pose for a photo at the former Paroba College in Everett, Washington on Saturday, June 1, 2024. (Annie Barker / The Herald)
Woman brings Latino culture to business education in Snohomish County

Rosario Reyes spent the past 25 years helping other immigrants thrive. Now, she’s focused on sustaining her legacy.

Annie Crawley poses for a photo with her scuba gear at Brackett’s Landing near the Port of Edmonds on Saturday, Feb. 3, 2024 in Edmonds, Washington. (Annie Barker / The Herald)
Edmonds ocean activist to kids: Life is better under the sea

From clownfish to kelp, Annie Crawley has been teaching kids and adults about the ocean’s wonders for three decades.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.