New Economic Data Suggest Spike in Health Spending

The White House sought to quash any fear that Obamacare is reversing downward trends in health spending as very preliminary estimates for U.S. economic growth in the first months of 2014 suggested spending on healthcare is rebounding sharply.

Health spending during the first quarter was on pace to increase by $43.3 billion in 2014, according to the first best guess from the Bureau of Economic Analysis. That would mean a 9.9% rise in consumer spending for hospitals, nursing homes, physician visits and other healthcare services—much higher than the spike economists and federal actuaries projected would come as millions gained insurance through the Patient Protection and Affordable Care Act.

In a blog post, the White House described higher demand for healthcare as “neither a surprise, nor a cause for concern” in light of the Affordable Care Act's insurance expansion, which seeks to improve access to care. “Furthermore, any upward pressure on healthcare spending growth from expanding insurance coverage will cease once coverage stabilizes at its new higher level, so it does not affect the longer-term outlook for spending growth,” the administration wrote. The post also noted that healthcare prices increased marginally at a rate of 0.5% annually.

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Source: Modern Healthcare