Health Spending Report Evidence of “Stimulus'” Failure
The Medicare actuaries released their annual estimates of health spending today, and found that medical expenditures grew at an annual rate of 3.9 percent in 2010. From the abstract through the conclusion, the full study (subscription required) makes clear the primary reason why health spending continued to grow, but at a slower pace than in recent years:
The latest recession had a dramatic effect on [health care] utilization…
Although medical goods and services are generally viewed as necessities, the latest recession had a dramatic effEcect on their utilization. On average, between 2007 and 2009, growth in the use and intensity of health care goods and services contributed 1.4 percentage points to the annual growth in personal health care spending (5.0 percent). This was much lower than its average contribution of 3.3 percentage points between 2000 and 2006, when personal health care spending grew 7.6 percent, on average.
Even though the recession officially ended in 2009, its impact on the health sector appears to have continued into 2010: Health care spending experienced historically low rates of growth in 2009 and 2010 as the impact of the recent recession continued to affect the purchasers, providers, and sponsors of health care. Persistently high unemployment, continued loss of private health insurance coverage, and increased cost sharing led some people to forgo care or seek less costly alternatives than they would have otherwise used. As a result, growth in the use and intensity of health care goods and services in 2010 accounted for a much smaller share of personal health care spending growth than in previous years.
Not surprisingly, the White House blog post on the report mentioned nothing about the economic slowdown – their post claims that “thanks to [Obamacare,] we’re keeping costs down.” But the analysis from the Medicare actuary is clear: spending growth was slower than projected NOT because Obamacare worked, but because the Obama “stimulus” didn’t. And while the Administration attempts to take credit for slowing health costs, what they’re really taking credit for is a stagnant economy due to President Obama’s failed policies.