What Drove the Recent Slowdown in Health Spending Growth and Can It Continue?

Research Report

What Drove the Recent Slowdown in Health Spending Growth and Can It Continue?

Abstract

National health expenditures have grown at record-low rates for the past three years. The recession has been cited as an important driver of recent trends leading many to wonder if slower spending growth will continue as the economy recovers. We review the trends in health spending growth over the last decade and show that growth began to slow well before the most recent recession. We also consider trends in incomes and insurance coverage and suggest that declines in real incomes and a shift towards less generous insurance arrangements have slowed the growth in provider revenues and forced cost containment efforts. The question remains, however, as to whether the changes that slowed health spending growth over the last decade will be maintained or extended as the economy recovers and the Affordable Care Act expands health insurance coverage.

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