One of the few things that has helped the federal budget mess in recent years is lower than expected Medicare spending. A working paper from the Congressional Budget Office tries to understand why the slowdown occurred and whether it might persist. (CBO Report) Between 1980 and 2005 spending rose at about 8% on a per beneficiary basis in traditional Medicare. Between 2007 and 2012 that rate fell to 3%. After adjusting for inflation there is about a 3.2% difference in growth rates in the two time periods. The authors looked at demographic factors, reimbursement and other program changes and economic factors. The decrease in trend occurred across all major spending categories–inpatient, outpatient hospital, physician services, lab, etc; although at different rates. The slowdown also appeared to exist in all geographic regions and for both high and low-cost beneficiaries. Although the severe recession may have affected spending in the commercial population it does not appear to have significantly affected demand in the Medicare program. As the boomer population begins to age into Medicare, they tend to be healthier and have lower costs than the older existing Medicare population, and therefore that influx lowers average spending, but that only accounted for .3% of the gap. Beneficiaries only enrolling in Part A accounted for another .3%. About 2.4% of the spending trend difference was not clearly linked to a certain factor. The authors suspect something was at work to change provider treatment patterns. Because they had difficulty making a definitive cause attribution, the authors were reluctant to predict whether the slowdown would continue, but suggested that since it was not due to general economic factors, it likely could.
Why Has Medicare Spending Growth Slowed?
By Kevin RocheAugust 29, 2013Commentary
✅ Subscribe via Email
About this Blog
The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry. Mr. Roche is available to assist health care companies through consulting arrangements through Roche Consulting, LLC and may be reached at [email protected].
Healthy Skeptic Podcast
This is an outstanding report on total global drug spending and trends, with projections out to 2025. It helps you understand this important area of health care, which does much...
June 1, 2021
MedPAC 2019 Report to Congress
June 18, 2019
Another example of over-priced companies trying to find some way to survive in the post-epidemic financial world. Transcarent, which does something, somehow to “access high quality, affordable care” is buying...
March 6, 2023
In an attempt to swiftly revive two floundering health care companies, a PE firm has announced the merger and recapitalization of Revive Health and SwiftMD. You know they are...
January 30, 2023
Investors have not yet learned their lesson, as Pearl Health gathers a new round of $75 million in capital for its business of supporting physicians who want to participate in...
January 30, 2023
Access ACO Care Management Chronic Disease Comparative Effectiveness Consumer Directed Health Consumers Devices Disease Management Drugs EHRs Elder Care End-of-Life Care FDA Financings Genomics Government Health Care Costs Health Care Quality Health Care Reform Health Insurance Health Insurance Exchange HIT HomeCare Hospital Hospital Readmissions Legislation M&A Malpractice Meaningful Use Medicaid Medical Care Medicare Medicare Advantage Mobile Pay For Performance Pharmaceutical Physicians Providers Regulation Repealing Reform Telehealth Telemedicine Wellness and Prevention Workplace
March 25, 2023
Coronamonomania Lives Forever, Part 201
Tired of March Madness? A boringly refreshing dip into some CV-19 research summaries is recommended.
March 24, 2023
The CDC Is a Font of Methodological and Statistical Error
Several times in the last three years I and others have pointed out serious flaws…
March 24, 2023
A Couple of Health Care Notes
A couple of pieces of health care research focus on high health care spending and…