U.S. health care spending last year grew at the fastest pace since President Barack Obama took office, driven by expanded coverage under his namesake law and rapidly rising prescription drug costs, the government said Wednesday.
After five years of historically low growth, national health expenditures increased by 5.3 percent in 2014, reaching $3 trillion, or $9,523 for every U.S. man, woman and child. That followed a 2.9 percent increase for 2013. Such seemingly small percentage shifts resonate when the total is $3 trillion.
The report by nonpartisan experts at the Department of Health and Human Services is an annual snapshot of the nation’s health care system, a major slice of the economy. Rising spending eventually has consequences for taxpayers, employers and individuals.
For the Obama administration, it may signal the end of an unusually long lull in health care inflation. Critics will point to the report as authoritative evidence the health law is starting to raise costs.
“From the political point of view, it’s absolutely significant,” said Robert Blendon, who follows public opinion on health care at the Harvard T.H. Chan School of Public Health.
Underscoring concerns about affordability, the report also found that health care spending grew faster than the economy as a whole, reaching 17.5 percent of GDP. That’s worrisome because it means health care is claiming a growing share of national resources.
“The return to faster growth and an increased share of GDP in 2014 was largely influenced by the coverage expansions of the Affordable Care Act,” said the report, referring to Obama’s law. It made no predictions, saying future trends depend on how the health care industry adjusts to continuing change and how the economy fares.
Political appointees at HHS responded quickly, saying that spending is still not growing as fast as in the years before Obama’s law, which passed in 2010.
“Health care spending growth stayed well below the trend seen prior to the Affordable Care Act,” Richard Frank, a top economic adviser, said in a statement.
The increase “is not surprising given that more people are covered and getting the health care they need,” Frank added. Much of that growth “will be temporary and will fade in the coming years,” he suggested.
Some outside experts who reviewed the report say they don’t see a return to galloping inflation, but even modest increases could lead to affordability problems.
“We don’t read in this any sign that the pressure is off now and we are going back to double-digit growth,” said economist Charles Roehrig of the Altarum Institute, a Michigan-based nonprofit that does health care system research and consulting.
Source: Dayton Daily News