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Health Spending Growth Slowing, More on Pace with Economic Growth

Last month, two health policy non-profits released detailed information and graphs about health spending in the U.S. The Peterson Center on Healthcare partnered with the Kaiser Family Foundation to create a Health System Tracker for health spending and other quality and cost trends in the health system.

One section of the website details how U.S. spending on health care has changed over time. While health care costs have risen dramatically over the past few decades, since the passage of the Affordable Care Act (ACA), there has been a slight slowdown in the rate of growth that might bode well for future cost containment. Until recently, the growth of health spending has far outpaced general economic growth. However, the Health System Tracker shows that health spending growth has slowed and the gap between health spending and economic growth is closer than it has ever been within the tracker’s data set. By comparison, in the first decade of the 2000s, health spending growth was nearly double economic growth, while it has been closer to on pace since 2010.

The major payers of health spending—Medicare, Medicaid, and private insurance—are also seeing less growth in spending per enrollee, with Medicare and Medicaid showing more improvement than private insurance. Surprisingly, the growth in prescription drug spending, as well as hospital and physician spending, has also slowed in this decade.

These data do not prove the ACA has contained health spending growth, but they are a positive sign that something has caused a change. How lasting these improvements may be and whether recent changes to the ACA and within the Centers for Medicare & Medicaid Services will affect health spending are yet to be seen.

Explore the Health System Tracker.

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