This report got a lot of attention by opponents of the PPACA and in the media. Increasingly, I believe “opponents of the health care law” and “the media” are not actually two separate groups, but in any event this portion of the projection got a lot of attention:
Well, last week the Office of the Actuary in the Centers for Medicare and Medicaid Services published the latest projections of health spending in the journal Health Affairs. Attention focused mainly on the Actuary’s estimate that national health spending would grow to almost 20% of GDP by 2020 and that the Affordable Care Act (ACA) would have a negligible impact on the rate of growth in health spending.
Rate of growth.
But, this is also true, and it’s in the same report:
The Actuary said that the ACA will largely pay for itself, producing savings in health care spending that will offset the additional costs as the uninsured gain coverage, have better access to care, and have lower out-of-pocket costs.
And now there’s this, which got no (national) attention at all:
While our elected representatives wrangle over slicing entitlements, virtually no one seems to be paying attention to an eye-popping fact:Medicare reimbursements are no longer accelerating at a break neck-pace. The new numbers should be factored into any discussion about healthcare spending: From 2000 through 2009, Medicare’s outlays climbed by an average of 9.7 percent a year. By contrast, since the beginning of 2010, Medicare spending has been rising by less than 4 percent a year. On this, both Standard Poor’s Index Committee and the Congressional Budget Office (CBO) agree. (S&P tracks healthcare spending with the help of Milliman Inc., an independent actuarial and consulting firm.) What explains the 18-month slow-down? No one is entirely certain. But at the end of July David Blitzer, the chairman of Standard &Poor’s Index Committee, told me: “I’m hesitant to say that this is a clear long-term trend. But it’s more than a blip on the screen.”
In the S&P report on healthcare spending released on July 21, he wrote: “many participants [in the healthcare system] have indicated that providers are trying to address health care reform and are looking for ways to control costs. If true, this combination certainly would be a contributory factor to the moderation in cost we have witnessed since early 2010.”
And here’s a name from the past to explain it all:
Zeke Emanuel, an oncologist and former special adviser for health policy to White House Office of Management and Budget director Peter Orszag, is certain that this is what is happening. When I spoke to him last week, Emanuel, said: “This is not mere chance: this is directly related to the initiation of health care reform.” It is not the result of reform, Emmanuel emphasized. The reform measures that will rein in Medicare inflation have not yet been implemented. But, he explained, providers are “anticipating the Affordable Care Act kicking in.” They can’t wait until the end of 2013: “They have to act today. Everywhere I go,” Emanuel, added, “medical schools and hospitals are asking me, ‘How can we cut our costs by 10 to 15 percent?’ “This is doable, since there is so much fat in the system” said Emanuel.
I don’t know what it means. It rose so fast and so long maybe it’s just finally leveling out.