You are here:HomeIssuesHealth Care Reform2013Healthcare Cost Slowdown Could Save $770 Billion

Healthcare Cost Slowdown Could Save $770 Billion

People with health insurance saw increases in their medical costs slow from 2009 to 2011, signaling potential structural changes in the industry that could cut healthcare inflation and save the U.S. hundreds of billions of dollars, according to two studies...
May 14, 2013

People with health insurance saw increases in their medical costs slow from 2009 to 2011, signaling potential structural changes in the industry that could cut healthcare inflation and save the U.S. hundreds of billions of dollars, according to two studies. The studies aim to shed light on why the annual growth of medical spending slowed from a high of about 8.8 percent in 2003 to an average of about 3 percent per capita from 2009 to 2011, according to data reported in January by the U.S. Centers for Medicare and Medicaid Services.

A study by Harvard University health economist David Cutler and Harvard Medical School healthcare policy professor Michael Chernew, published in Health Affairs, reveals that medical costs for people with health insurance grew at a slower rate from 2009 to 2011, attributed to increased use of generic drugs, higher out-of-pocket costs, and improvements in care efficiency, in addition to the recession. Around 37 percent of the slowdown in health costs from 2003 to 2011 could be attributed to the recession, 8 percent to a decrease in private insurance coverage and Medicare payment cuts, and 55 percent to structural changes. If the trend continues, the U.S. may recapture $770 billion in unexpected savings from projected expenditures by 2021, wiping out a fifth of the federal budget deficit.

Healthcare Cost Slowdown Seen Saving Up to $770 Billion (Bloomberg 5/7/13)

Filed under: