Health care spending is stabilizing – why?

There have been a plethora of reports of late indicating health care spending trend has decreased significantly – to an average of 3.9 percent since 2009; the trend appears to be continuing today.  This after annual increases ranged from 6.2 to 9.7 percent between 2000 and 2007.  While there’s no denying an increasing portion of costs have been borne by insureds dealing with higher out-of-pocket costs, there’s something else going on here.

The question is – what?

The quick answer is – several things.

First, the continued sluggish economy; recent research published by the Kaiser Family Foundation attributes about three-quarters of the decline to the recession; others think it is only about a third.

Second, increased deductibles and co-pays account for about a fifth, according to some researchers.

More encouraging is the sense (and it is ONLY a sense) that the new contracts between insurers and providers are partially responsible.  

Health plans and providers (mostly health care systems) are increasingly basing reimbursement less on fee-for-service and more on accountable-care type methodologies, wherein providers benefit from delivering less, not more care.  The evidence for this is best described as “anecdotal data”; several health plans are reporting lower inpatient admissions, reduced length of stay, fewer expensive procedures, more generic meds, better care for chronically ill patients along with fewer acute episodes.

This is a big deal – a very big deal.  We will be digging into this for the rest of the week.