Meghan McCarthy of the National Journal posted a good overview of the alternative explanations for the recent slowing in the increase in health care costs, which rose less than four percent in each of the past two years. Medicare costs, she points out, has slowed even more dramatically.The latest survey from the Kaiser Family Foundation shows insurance premiums rising just 4 percent this year.
The first reasons she offers parallel the official analysis from the Centers for Medicare and Medicaid Services: the recession has caused people to postpone elective surgeries or physician visits, which, like most health care, entail out-of-pocket costs. She then offers competing views on the role of the Affordable Care Act and reasonably quotes former Republican chief of CMS Gail Wilensky, who points out that it’s hard to credit something whose major provisions haven’t gone into effect yet.
She concludes with comments from the Urban Institute’s Robert Berenson, a former CMS official and physician, who credits the reform “environment,” not any specific element of reform: “Physicians and others are getting the message,” he said. “I suspect physicians are tired being criticized for not being able to restrain themselves. It’s more health reform in general, rather than specific provisions that are associated with ACA.”
There is precedent for that view. The last time there was a multi-year slowdown in the pace at which health care spending increased was between 1994 and 1996, during and after the Clinton-era debate over health care reform. While the legislative effort failed, it sparked a massive rush by insurers and employers to enroll people in health maintenance organizations, which succeeded for a time in holding costs in check (mostly by denying care, which led to a late 1990s backlash by the patients rights movement).
Today, hospitals and provider networks are moving to establish accountable care organizations and preparing for a new era of cost-controlled medicine. As Berenson points out, providers, tired of being blasted for their wasteful practices (even the Institute of Medicine earlier this month signed onto the analysis that said nearly a third of all health care expenditures are wasted), are preparing for a new era. Contrary to Wilensky, reform can work even before it goes into effect.
Merrill Goozner is an award-winning journalist and author of “The $800 Million Pill: The Truth Behind the Cost of New Drugs” who writes regularly at Gooznews.com.