Sarah Kliff takes a look at the newly released National Health Expenditure report, the annual assessment from the Center for Medicare Services on health care spending, that shows good and not so good news.
First, health care spending is slowing.
After years of outstripping the rest of the economy, health care costs are now growing at the exact same rate as the rest of the gross domestic product. Over the past two years, in fact, health care costs have grown more slowly than any other point in the past five decades, according to the report, parts of which are published in the journal Health Affairs. They rose 3.8 percent in 2009 and 3.9 percent in 2010. [...]
Since health care spending and the economy grew at similar rates in 2010, health care spending as a share of GDP remained unchanged at 17.9 percent.
The not so good part of that is reflected in this graph:
The key element is at the far right of the graph, reflecting real drop in the use of health care. That means that among the forces driving down health care costs is simply less usage during this recessions, because Americans are remaining uninsured and simply can't afford medical spending.
That's not the only factor in the slowed rate of growth in health care spending. Medicare spending growth has been slowed signficantly, as has Medicaid spending on prescription drugs and Medicare spending on home health care, all a result of actions by the Obama administration. Once again, we've got a solid demonstration of how a single-payer system can be more cost-effective. Medicare and Medicaid shouldn't be shrunk right now, they should be expanded.