Health Spending Growth: Regressing or on Hiatus

Uwe Reinhardt has some thoughts on the “moderation” of health spending.  He notes:

First, depending on the beginning and end points one chooses for calculation, the average percentage points by which the annual growth in health spending has exceeded the average annual growth in G.D.P. over the chosen period – a difference known among health policy analysts simply as “excess cost growth” – can vary quite a bit. One really needs charts like these to study the phenomenon, not point-to-point averages.

Second, the annual growth in real health spending per capita appears to have fluctuated around a long-run trend that has declined ever so gently over the longer period (see the blue line in Chart 3). That trend reflects in part that the annual growth in real G.D.P. per capita has also fluctuated around a gently declining trend line. As is shown in Chart 4, the trend line around which excess growth fluctuates is virtually flat.

The graphs show a huge yearly difference in the rate of increase in health care spending.  Read the article to view them.

Medicynical Note:  What’s missing from the article is a comparison of the increase in costs of health care with increases (or lack thereof) in income over the same period.  GDP increments miss entirely the huge disparities in wealth that have evolved in the past 30 years and the resulting poverty, decreases in real income, and decreases in the ability to pay for anything, including health care. 

The dilemma of U.S. health care is seems obvious.  Our costs have exceeded our individual and collective ability to pay.  How to resolve the disparity is the issue.

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