McKinsey group believes the slowdown in the growth of health care spending is complicated but at least in part driven by “value” seeking consumers . They note that consumers are paying a larger proportion of their health care expenses and that makes them more conscious of cost.
Remember we are talking about a decrease in the rate of increase, not an actual decrease in the amount spent. In fact, our spending per-capita still far exceeds what one would expect even given our wealth when compared with other countries around the world. This is evidence of an inefficient non-competitive approach.
The historic slowdown in spending growth was caused by the convergence of a number of factors, including changes in benefit design, structural shifts within specific segments of the health economy, and a recession from which the U.S. economy has been slow to recover. Changes in coverage patterns and the decline in the share of the population with private insurance during the recession have also played an important role. Between 2007 and 2009, the number of people with employer-sponsored or private individual insurance fell by nearly 10 million. In 2009, the share of Americans with private insurance slipped to 64.5 percent – the lowest in 20 years of census records – while the share receiving public assistance and the percent uninsured both reached record highs.
Despite the “slowdown” our costs/capita for health care remain by far the highest in world. For example hospital costs, even with the decreased “utilization:”
Medicynical Note: Mckinsey may view this decreased rate of increase as a search for value in health care, which is laudable.
However, searching for value when it’s driven by lack of insurance, substandard coverage and poverty easily morphs into inadequate access, delays, and substandard health care (economic rationing).