A new report finding that US healthcare spending rose 5.3 percent last year to $3 trillion generated widespread print and online media coverage. CMS actuaries attributed the increase to the ACA’s coverage expansion and rising drug costs, and several outlets say critics are likely to seize on the finding as evidence the health law has failed to control costs.
The Washington Post (12/3, Johnson) reports in its “Wonkblog” that US healthcare spending reached $3 trillion last year, rising “5.3 percent to $9,523 per person, according to an analysis by the Centers for Medicare and Medicaid Services published in the journal Health Affairs on Wednesday.” The Post says the expansion of insurance coverage under the Affordable Care Act “was a main driver: In 2014, 2.2 million people gained private health insurance and 7.7 million joined Medicaid, most of whom were newly eligible for the coverage due to coverage expansion under health reform.” Another factor was prescription drug spending, which rose more than 12 percent “to $297.7 billion – its largest annual increase in more than a decade.” Richard Frank, assistant secretary for planning and evaluation at HHS, argued the faster growth was a temporary bump. “Today’s numbers on national health spending show that as millions more Americans gained coverage in 2014, health care spending growth stayed well below the trend seen prior to the Affordable Care Act,” he said in a statement.
The New York Times (12/3, Pear, Subscription Publication) notes the 5.3 percent increase in total health spending follows “five years of exceptionally slow growth.” In 2013, health spending grew 2.9 percent. Still, CMS Acting Administrator Andrew M. Slavitt said the “rate of growth remains below the level in most years prior to the coverage expansion, while out-of-pocket costs grew at the fifth-lowest level on record.”
The Wall Street Journal (12/3, Armour, Subscription Publication) reports that Federal healthcare spending grew 11.7 percent in 2014, up eight percentage points from 2013. The Journal adds that the growth in prescription drug spending is due partly to expensive new treatments for hepatitis C, cancer, and multiple sclerosis.
The AP(12/3, Alonso-Zaldivar) says the faster growth in health spending “may signal the end of an unusually long lull in health care inflation that yielded political dividends.” While the ACA expanded coverage, “the cost problem doesn’t appear solved,” and critics “will point to the report as authoritative evidence the health law is starting to raise costs.” The Washingon Post (12/3, Howell) says the “increase challenges claims that the Affordable Care Act would help lower overall health costs in America.”
The Los Angeles Times (12/3, Terhune) reports, however, that “some experts say the growing use of narrow provider networks by employers and health insurers and a shift away from conventional fee-for-service reimbursement for medical providers could be potent cost-containment tools.”
Bloomberg News (12/3, Tracer) reports Slavitt said, “Today’s report reminds us that we must remain vigilant in focusing on delivering better health care outcomes, which leads to smarter spending, particularly as costs increase in key care areas.”