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Three Things To Know About Future Healthcare Spending

Peter Ubel
CONTRIBUTOR : Forbes.com

For my entire life, a half century and counting, healthcare spending in the U.S. has almost always risen faster than inflation. Sometimes it’s relatively slow, sometimes it’s relatively fast, but no matter the time, healthcare spending is climbing. Getting healthcare spending under control is really important for us to do if we hope to have any money left in this country to spend on other important things. You know–like food, shelter, education. That kind of stuff.

So are we in the process of getting healthcare spending under control? A couple recent studies shed light on this question.

The first comes from the Bureau of Economic Analysis, an agency within the Department of Commerce . Using a new measure, researchers at the Bureau were able to break down healthcare spending by disease, or at least by a general category of health conditions: cardiology care, for instance, versus cancer care. They looked at two time periods: 2000-2005, a time period of high growth in spending, and 2006-2010, a time of slower growth. They tried to figure out what explained the slower growth in that time period.

Their biggest finding was that the slowing of growth did not occur primarily because fewer people got sick. Growth didn’t slow down, for example, primarily because cholesterol treatment reduced the number of people experiencing heart attacks. Instead, spending slowed mainly because the cost of treating people with problems like heart attacks stopped rising so quickly, what the researchers called the “cost per case” of treatment. Here’s a picture showing that result, with the cost per case line essentially flattening out between 2006 and 2010:

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Three Things to Know About Future HC Spending 1

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