Amidst the dark skies of the Healthcare.gov launch, some daylight may finally be emerging with respect to one of the critical goals of the Affordable Care Act—bending the cost curve of America’s expensive healthcare system.
According to a New York Times report out Tuesday, the Congressional Budget Office has quietly removed hundreds of billions of dollars from the projected costs of Obamacare, primarily the result of an anticipated decrease in the federal government’s contribution to the Medicaid expansion program along with the projected cost of the subsidy payments to those buying private insurance policies on the healthcare exchanges.
Why the good news?
The more favorable projections are the direct result of the slowing trend in the growth of healthcare spending over the past five years leading to a slowdown in rising costs. While, ten years ago, per-capita spending on healthcare had been growing by an average annual rate of 5 percent, that number was dramatically cut to 1.8 percent during the 2007-2010 period and reduced even further to 1.3 percent in the years following 2010.
Do we have Obamacare to thank for this highly successful “bending” of the cost curve? Naturally, the answer depends upon who you ask as there simply is no definitive way of knowing—yet.
While most economist believe that the lion’s share of the reduction is due to the sluggish economy—making Americans far more careful when it comes to making decisions regarding when or if to spend money on medical care—others believe that some of the plans built into the ACA designed to get people to spend less may actually be working.
Among Obamacare inventions that do appear to be paying off in lower healthcare costs is the government’s refusal to pay hospitals more when patients are re-admitted within 30 days of their initial discharge. Additionally, new plan designs engineered to reward providers for quality of care rather than for quantity of care may well be paying off in terms of lowering the overall cost of care.
According to the Kaiser Family Foundation—widely regarded as an honest, non-partisan broker when it comes to healthcare issues and analysis—the declining increases in the cost of healthcare is 75 percent the result of economic factors and 25 percent a benefit of the cost cutting measures in the ACA that do, in fact, appear to be working.