Near-Term Pressures Will Hold Healthcare Spending in Check, According to NEJM

Even though roughly 9 million Americans have gained healthcare coverage, other forces related to the “anemic recovery” will keep healthcare spending under control, at least in the short term, writes Charles Roehrig, PhD, in a commentary published online yesterday in the New England Journal of Medicine.

Dr Roehrig, of the Center for Sustainable Health Spending, Altarum Institute, Ann Arbor, Michigan, revisits reports from the spring that the 5-year period of slowed healthcare spending, attributed to the recession that arrived in 2008, was over. Waves of new enrollees now covered due to the Affordable Care Act (ACA), coupled with an expanding economy, had pushed healthcare spending to an annualized rate of 10% in early 2014. But that figure was later scaled back drastically, and Dr Roehrig writes that healthcare spending actually fell slightly to 0.9% in the first quarter.

What accounts for this shift? Dr Roehrig writes that the normal rules of expanded coverage don’t quite apply to those gaining coverage under ACA. First, all are under age 65; while some have pent-up healthcare demand, as a group their needs do not rival seniors.

Second, last year’s harsh winter and the fact that many enrollments happened at the end of the first quarter account for the revised spending figure. Then, there’s the nature of how having more people insured is starting to shift healthcare spending. Already, some data are showing shifts away from expensive emergency room spending.

Finally, there’s also the economy itself. As Dr Roehrig calculates, gains since 2009 have been slow and, in his view, continue to exert downward pressure on healthcare spending.

Around the Web

National Health Spending om 2014—Acceleration Delayed

Health Care Spending Picks Up