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Reducing the cost of Health Care while increasing access and quality of care was the primary goal of Health Reform.  Are we seeing signs that it's starting to work?

Without specifically verifing that hypothesis, a new Harvard Study shows strong signs that this just might be the case.

Health care spending growth has famously slowed over the past five years, significantly enough that the Congressional Budget Office recently revised its projections of Medicare and Medicaid spending over the coming decade downward by hundreds of billions of dollars.  Now, research papers suggests the recent slowdown doesn’t just reflect temporary economic weakness, but also structural shifts in how health care is delivered and financed — possibly attributable to the Affordable Care Act — and thus might be a harbinger of a longer-term trend.


“Our findings suggest cautious optimism that the slowdown in the growth of health spending may persist — a change that, if borne out, could have a major impact on US health spending projections and fiscal challenges facing the country,” the authors write.

Ok, so we're currently in Austerity-ville.  We're in the Sequester.  However it appears that the CBO latest projections in the reduction in costs to Medicare and Medicaid have risen to $770 Billion - which is about 3/4th of the entire Sequester.

In a related article, health care economist David Cutler attributes the majority of the slowdown to fundamental changes — including perhaps slowing technological and pharmaceutical innovation, and increased efficiency among providers. If current trends continue, he concludes, then over the next 10 years “public-sector health care spending will be as much as $770 billion less than predicted. Such lower levels of spending would have an enormous impact on the US economy and on government and household finances.”

To put it in perspective, that $770 billion is equivalent to about three-quarters of sequestration’s mandatory, indiscriminate spending cuts, which lawmakers have been unable to replace with either more targeted cuts or a mix of cuts and higher taxes. The paper implies that budget deficits will shrink by an amount similar to sequestration even if Congress were to simply rescind it.

Not only will public sector spending be reduced, the cost and expense of heathcare for the private sector is coming down, meaning that the economic speed brake that America's out-of-control Medical inflation just might finally be disengaged.

It means that wages may begin to rise and our enormous wage-gap might begin to close.

Now this study doesn't specifically attribute this change to the ACA, however the CBO itself has published their own projections of the impact of the ACA on Healthcare Premiums and Coverage.

The project that the number of uninsured persons in the U.S. will be reduced by 27 Million falling from about 58 Million in 2013 to 30 Million in 2023.

The Baseline CBO Budget Projections (Excel) indicates that the Deficit has come down from $1.1 Trillon in 2012 to $872 Billion in 2013.  This downward trend is expected to continue until 2015 where CBO projects the deficit to be at $433 Billion.  That's at 58% reduction, if we change nothing from where we are now.

We do not have a budget or debt crisis, nor do we need significant entitlement cuts - there are improvements that can be made but we're already headed in the right direction and the number one thing we can do is repair and restore the economy.  Shrinking Healthcare costs - rather than cost shifting from the government to individuals as the GOP plans do - go a long way towards accomplishing that goal.


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Comment Preferences

  •  A positive development, certainly (8+ / 0-)

    but it's important to note that this doesn't necessarily translate into lower health care costs for Americans; indeed, premiums in a lot of places continue to rise.

    That's a moral problem and also a political one for Democrats.

    •  Indeed, so many systems can be gamed... (3+ / 0-)
      Recommended by:
      tardis10, david mizner, FloridaSNMOM so many ways. Whenever government, the private sector, and money intersect, it seems to be inherently a cycle of better mousetraps vs. better mice.

      The ACA is a step in a process, or perhaps a move in a chess match. It moves us in the right direction, but nobody should be under any impression it wins the match.

      Perhaps we should best view the ACA as the knife which opens up enough space to drive in the wedge, which in turn might eventually break things wide open. But we have to put the wedge in at some point.

      Non futuis apud Boston

      by kenlac on Tue May 07, 2013 at 11:14:12 AM PDT

      [ Parent ]

    •  I recall the saying "bending the curve" (2+ / 0-)
      Recommended by:
      Gooserock, antirove

      And that a slowdown in the increases of costs was the long term goal, rather than a roll-back of insurance premiums.

      As Kenlac says, we have to put the "wedge" in and get universal/single payer in place in order to significantly reduce the "moral problem" you refer to.  I don't disagree that 30 million uninsured in 2023 is 30 million too many, but it's better than twice that number.

      But this is a good development, however much we remain to have severe issues with our health care system.  Eventually, if successes like this continue, the people who are against the ACA will run out of talking points.  It might also disarm the debt-hounds, also.

    •  Our costs are up in 2013 (2+ / 0-)
      Recommended by:
      Kickemout, Victor Ward

      and our insurer has already warned us about 2014.

      Couple that with Congress screwing around with the FSA (can't buy aspirin with it anymore....) - I usually reserve the max ($2,000) which doesn't cover co-pays and scripts for a family of three.

      I am actually considering paying the penalty a - saving for routine care and then, if something bad were to happen - buy insurance then since I can't be turned away for pre-existing conditions.  It may be gaming the system but if costs continue to increase - we won't be able to afford insurance - and if they can't turn me down - there's no incentive for me to have continuous coverage - I'll buy it and drop it as needed.

      The care of human life and happiness, and not their destruction, is the first and only legitimate object of good government. - Thomas Jefferson

      by ctexrep on Tue May 07, 2013 at 11:42:10 AM PDT

      [ Parent ]

  •  Our company premiums are skyrocketing, as usual (2+ / 0-)
    Recommended by:
    antirove, Victor Ward

    Company says it's due to increased costs because of implementing ACA.

    We are now in an open enrollment period. The plan that Ms. Unoball and I had, has been costing about $650 a month. That same plan will now be increased to about $1,020 per month.

    So I have had to downgrade our coverage, which will cost me still $350 per month. The new coverage has a $3,000 deductible vs. no deductible in the previous. The new coverage does have slightly lower costs for doctor visits. The new coverage has 80% payment of costs after meeting the deductible; the old coverage had 90% payment with no deductible to meet.

  •  Forecast Vs Reality (1+ / 0-)
    Recommended by:
    Victor Ward

    from Diary

    Not only will public sector spending be reduced, the cost and expense of heathcare for the private sector is coming down, meaning that the economic speed brake that America's out-of-control Medical inflation just might finally be disengaged.
    First don't confuse a forecast with what actually takes place.    The track record of CBO forecasts are not very good.

    The "reduction" is a smaller increase in what is forecasted - which is different from what most consider a reduction.

    The forecast is still for healthcare spending to be a rising share of GDP not a declining share of GDP.  

    Considering the far larger share of GDP the US spends on healthcare compared to the rest of the industrialized world, the share spent on healthcare should be declining not increasing.

    The most important way to protect the environment is not to have more than one child.

    by nextstep on Tue May 07, 2013 at 11:37:53 AM PDT

  •  strange conclusion (1+ / 0-)
    Recommended by:
    Victor Ward

    without much evidence and without ACA even really in place.

  •  Costs are coming down overall. Though (0+ / 0-)

    premiums can go higher in certain places without more stringent regulation.  Medicaid expansion will bring big cost savings.  The ACA is delivering on its promise to bend the cost curve and the key data point is that those whose use of the system has not dramatically changed have seen costs go down. (Again, it is not clear that the savings are being passed through to consumers in all cases).

    Alternative rock with something to say:

    by khyber900 on Tue May 07, 2013 at 12:11:18 PM PDT

  •  Good piece in the Times earlier this (0+ / 0-)

    "Throwing a knuckleball for a strike is like throwing a butterfly with hiccups across the street into your neighbor's mailbox." -- Willie Stargell

    by Yasuragi on Tue May 07, 2013 at 04:22:33 PM PDT

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