Health Care

Healthcare spending in the US grows at slowest rate since 1960

U.S. healthcare spending grew 3.6 percent in 2013, the slowest rate on record since 1960, federal health officials reported Wednesday.

The figures represent good news for the Obama administration in its effort to contain the growth of healthcare costs, though experts disagreed on how much the federal healthcare reform law has played a role.

Total medical expenditures in the United States reached $2.9 trillion last year, the Centers for Medicare and Medicaid Services (CMS) said in an annual report.

{mosads}The total share of the economy devoted to health remained largely the same, at 17.4 percent, while health spending per person was $9,255, up from $8,915 in 2012, the report stated. 

“This report is another piece of evidence that our efforts to reform the healthcare delivery system are working,” said CMS Administrator Marilyn Tavenner in a statement. 

Civil servants who prepared the report said ObamaCare influenced the slowdown but said the economy was the biggest factor.

“The most prominent provisions of the Affordable Care Act were implemented in 2014 and will be discussed in our historical report next year,” said Micah Hartman, a statistician in the Office of the Actuary at CMS. 

The conflicting emphases highlight a perennial policy debate over the historically low rise in medical spending over the last five years. 

Supporters of the Affordable Care Act are eager to tie the trend to the law’s reforms, while actuaries say the relationship between economic growth and health spending is a more likely factor. 

The White House touted the news as evidence ObamaCare is working.

“The Affordable Care Act has also made a meaningful contribution to recent trends by introducing payment reforms in Medicare and other public programs,” wrote Jason Furman, chairman of the Council of Economic Advisers, in a blog post Wednesday.

“These reforms … are generating significant savings in Medicare and, if recent research results are correct, catalyzing changes in the private sector that are generating additional savings.”

Republican leaders on Capitol Hill did not respond to requests for comment.

The slowdown described in the report was apparent across major sectors of the healthcare market. The 3.6 percent rate of growth represents a deceleration since last year, when health spending rose 4.1 percent. 

Experts pointed to slower growth in spending for Medicare and private health insurance as the most important reasons for the trend. Health insurance premium growth slowed from 4 percent in 2012 to 2.8 percent last year, while Medicare spending rose 3.4 percent, compared with 4 percent. 

Other sectors saw their rates of spending increase, exerting upward pressure on the total numbers. 

In Medicaid, expenditures rose 6.1 percent, to $449.4 billion or 15 percent of total health spending. The total cost of retail prescription drugs also rose 2.5 percent, the report stated. 

The figures were published Wednesday afternoon in the online version of the journal Health Affairs.

Updated at 6:25 p.m.

Tags Health Health care in the United States Jason Furman

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