A new NBER working paper by Amitabh Chandra, Jonathan Holmes and Jonathan Skinner looks at health care cost growth for different payers over the past decade to determine the causes of the recent slowdown in costs. The authors conclude that a combination of high-deductible plans, state-level Medicaid cost control and a slowdown in technological improvements are responsible for much of the reduced health care cost growth. However, they fear that these cost restraints will not last and that health care costs will grow at GDP + 1.2% over the next ten years.
An interesting nugget in the report is a comparison of real per enrollee and per capita spending between Medicare, Medicaid and private insurance.
Check it out:
NBER Working Paper/ Is this time different? The slowdown in healthcare spending
Real per capita and per enrollee Medicaid spending has not changed in more than a decade! On the other hand, private insurance and Medicare have risen more than 50 percent.
These are not total costs, but are on a per capita and per enrollee basis. Those are far metrics to use since an increase in population creates a larger tax base to fund Medicaid. Looking at costs on a per enrollee basis is a better way to see if increased costs are the result of more expensive care or more enrollees. Overall, total real Medicaid spending grew by 12% from 2002-2011.
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