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What’s Caused the Recent Slowdown in Health Spending?

How much of the recent slowdown in health spending has been due to the economic downturn?

How much has been from structural changes in the health system?

Are we in a period of high or low “excess” health spending?

What may happen to health spending if the economy recovers?

A new analysis by researchers at the Kaiser Family Foundation and the Altarum Institute’s Center for Sustainable Health Spending attempts to answer these questions. While the analysis sheds some light on the issues, the researchers indicate it will not settle the debate about reasons for the recent spending slowdown.

A strong link was identified between national health spending and economic business cycles and inflation. About 77% of the decline in health spending was due to changes in the economy, while structural changes in the health system had a more modest impact.  The researchers predict that national health expenditures will increase as the economy continues to recover, but probably not at the earlier double-digit rates. An ongoing focus on health care cost containment will be needed to keep growth rates low for the future.

Source: Assessing the effects of the economy on the recent slowdown in health spending. Snapshots: Health Care Costs, Kaiser Family Foundation, Apr. 2013. http://www.kff.org/insurance/snapshot/chcm042213oth.cfm

Posted by AHA Resource Center (312) 422-2050, rc@aha.org

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