Health Care Cost Inflation Is Tumbling

[Cigar]

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Much of this has been attributed to favorable structural changes like improved hospital efficiencies, increased use of generic drugs, and declining hospital readmission rates.

However, falling health care inflation may also reflect unfavorable cyclical forces. Maury Harris, UBS's top economist, wrote about this in a recent note to clients (emphasis added):

There are at least two implications if the slowdown in medical care inflation mainly reflects cyclically weaker health care spending stemming from relatively high unemployment and lesser or delayed spending by the uninsured. First, for the time being, slower medical care inflation could be signaling the effects of still high unemployment on consumer spending that can be postponed. In other words, slowing health care inflation might be a sign of continued sluggishness in the overall economy. Second, if slower medical care inflation mainly represents postponed health care demand, such inflation should start to re-accelerate as further unemployment reductions enable more venting of delayed (i.e., “pent-up”) healthcare demand.

But Harris doesn't dismiss the long-term structural argument either.

If slower healthcare inflation instead reflects longer-run and sustained changes in how the healthcare system operates, lesser health care inflation could become a more enduring characteristic of the U.S. economy. Examples of such changes could be Obamacare, improved bargaining power for third-party private and government purchasers vis-a-vis healthcare suppliers and more price comparison shopping by individuals.



Read more: http://www.businessinsider.com/what-health-care-cost-inflation-means-2013-10#ixzz2idlq38s1

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[Cigar]

Myth: Obamacare Destroying Full-Time Jobs, Creating Part-Time Economy

http://www.youtube.com/watch?feature=player_embedded&v=0AKiaNN8Z08

[Chris]

Interesting, it seems the market is correcting itself. But the effects seem better for government and business than it does for the individual.

Medical-Price Inflation Is at Slowest Pace in 50 Years (http://online.wsj.com/news/articles/SB10001424127887323342404579081312680485476)


Medical prices are rising at their slowest pace in a half century, a shift in the health-care industry that could provide relief to government and businesses' budgets while also signaling consumers are being left with a larger share of the bill.

...The price data help explain why growth in overall health spending has slowed down in the past several years. The trend, if continued, has big implications for the government's finances because health-care costs are the biggest long-term driver of the federal deficit....

...Economists have long seen the prices of medical services as the core reason that U.S. medical spending towers over that of other nations....

The recent slowdown in medical inflation is partly the result of less-generous health plans forcing patients to pay more attention to prices, doctors say.

"Fifteen years ago, pricing was not as important…[but] when the co-pay is coming out of a patient's pocket, they more often want to know what they're paying," said Moshir Jacob, medical director at the Toledo Clinic. The Ohio practice advertises that it offers lower prices than area hospitals.

...The 2008 financial crisis pushed inflation down across the board, but even as the economy recovered slowly, medical inflation didn't pick up....

...Others doubt there has been a structural change....

"We haven't done anything in the past three or four years that fundamentally altered the health-care system," said Gerard Anderson of Johns Hopkins University, who was the lead author of the "It's the Prices, Stupid" paper a decade ago. "And everything in Obamacare that tried to control cost was watered down."

Prof. Anderson said the recent recession was the primary explanation for the slower medical inflation.

..A sharp slowdown in prescription-drug price gains, largely due to wider availability of inexpensive generics, has helped ease broader medical inflation as well.

...

[lynn]

The slowdown in healthcare spending is the result of health insurance companies increasing deductibles. Many people were used to having insurance for years with only having to pay a co-pay or a $50 to $100 deductible. The media only mentions this part occasionally. The government however will declare it a success in 2014 since now more and more people are subject to high deductibles which makes it impossible to get healthcare.

Why would people want to get that "free preventative care" to find out that they have a chronic condition that is going to cost them out of pocket to pay for it? It is human nature to stay in denial especially when they know they can't afford the care they need to manage it.

[patrickt]

Amazing. The inflation is almost down to where it was before the appearance of the clown in Washington.

[shaarona]

Amazing. The inflation is almost down to where it was before the appearance of the clown in Washington.

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