Meanwhile, Robert Samuelson considers why the rate of increase in healthcare spending has slowed:
So: Two broad theories address health spending’s slower growth. One highlights the economy. The other — though not ignoring the economy — emphasizes policy and behavioral changes. It matters which is more correct.
Health spending faces increases from three sources: Obamacare (more people will be insured); an aging population (older people use more health care); and expensive new medical technologies. If market and regulatory pressures don’t offset these gains, spending may again outpace the economy.
I’m inclined to think that the slowing is multi-factorial. I’ll propose another factor: healthcare costs don’t rise at the same rate all the time but in fits and starts. That’s been true for decades and it’s probably true now.
For me the more important question is what does “under control” mean? Right now healthcare prices are rising faster than prices in the non-healthcare part of the economy, faster than incomes, and faster than public revenues. That is by no stretch of the imagination under control.
My definition would be costs that rise at a rate we’re willing to pay while maintaining a reasonable level of public health. There are at least three things packed into that sentence and none of them is the case now.
The slowing is multifactorial. I think most of it is from the economy, but some is policy and behavior. I will settle for slowing costs to the point where they approximate inflation.
Steve
Sure. Non-healthcare inflation. Since healthcare accounts for about half of all inflation, it will need to be a third of what it is now to do that.