Monday, January 6, 2014

À votre santé

Jason Furman, Chairman of the Council of Economic Advisers, knows who signs his paychecks;
For decades a common refrain was that the rapid rise in health spending hurt the competitiveness of American businesses and ate into workers' take-home pay. Businesses and politicians from both sides of the aisle agreed that something had to be done to slow the growth of health-care costs. New data Monday from the Centers for Medicare and Medicaid Services show that we are making important progress. From 2010 to 2012, health spending grew at an annual rate of just 1.1% in real per capita terms—the lowest rate in the 50 years we have been collecting these data, and a small fraction of the 6% rate that inaugurated the past decade.
This historic but largely unheralded slowdown in health spending, which is thanks in part to the Affordable Care Act (ACA), is helping to boost employment, lower deficits and bolster wage growth as the job market strengthens.
What's the mechanism here?  The government spends less on Medicare now, that's what;
The ACA is directly responsible for a substantial portion of slowdown in Medicare's growth over the past few years, with the Congressional Budget Office (CBO) estimating that the ACA would reduce Medicare spending by $17 billion in fiscal 2013 by reducing overpayments to private plans and providers and by shifting toward paying for value rather than for services. 
Not too surprising that a decision to spend less on healthcare results in...spending less on healthcare. Which might be a good thing if you're the one having to spend the money--that you'd like to spend on something else--but what if you're one of those who, you know, actually needs medical care?

About that, Dr. Furman says; ....

Then, he admits, in his final paragraph, the lower spending is only temporary anyway;
To be sure, the ACA's measures to expand and improve coverage will temporarily increase the growth of national health expenditures, but they will not negate these trends toward slower growth in prices and cost per beneficiary throughout the health system.
Whatever that means, it doesn't say that the American people will have better health care going forward.

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