Tag Archives: business

Hell is Freezing & Pigs are Flying

The growth of health spending in the United States is slowing!  No, this is not a typo.  Most policy wonks are surprised with some even muttering that there is room for optimism about the federal government’s long-term fiscal performance.

Of course, much of this trend is attributed to the recession.  But, more intriguing, it also may be due to changing behavior by consumers and providers of health care – meaning that the lower rates of growth might persist even as the economy improves .

In 2009 and 2010, total nationwide health care spending grew less than 4 percent per year, the slowest annual pace in more than 50 years.  After years of accounting for a growing share of economic activity, health spending held steady in 2010, at 18 percent of gross domestic product.

The slowdown was sharper than experts predicted.  The seemingly impossible may be happening – doctors and patients may have begun to change their behavior in ways that bend the cost curve.  Is it possible that hell is freezing and pigs are beginning to fly?  What could explain this remarkable trend?

It may just be a blip caused by the economy’s weakness.  But a few other more intriguing things are starting to happen.  There has been a surge of high-deductable health plans in which consumers have an incentive to think twice before heading to the doctor.  Another factor may be fewer expensive, novel drugs coming onto the market, as well as growing pressure to use generics which are much less expensive than “brand name” ones.  Lastly, health economists point to a shift toward accountable care, in which providers are paid for the quality of care, not the quantity of care.

I’m keeping an eye on this trend.  Hopefully, it’s not a fake-out.  Maybe we really are starting to figure out how to deliver care more effectively and efficiently.  And to all of us trying to live healthier lives, take a bow.