This is the second article we’ve read in recent weeks which states that healthcare spending is actually down, not rising as the government predicted:  “A recent study – authored by nationally-recognized economists from Harvard University – concludes that public healthcare spending could drop over the next 10 years by as much as $770 billion below predictions. The study appears in the May issue of Health Affairs, the leading journal at the intersection of health, healthcare, and policy.  ‘Despite earlier forecasts to the contrary, U.S. healthcare spending growth has slowed in the past four years, continuing a trend that began in the early 2000s. We find that the 2007-09 recession, a one-time event, accounted for 37 percent of the slowdown between 2003 and 2012. A decline in private insurance coverage and cuts to some Medicare payment rates accounted for another eight percent of the slowdown, leaving 55 percent of the spending slowdown unexplained,’ said study authors David M. Cutler and Nikhil R. Sahni. Cutler is the Otto Eckstein Professor of Applied Economics in the Department of Economics at Harvard University, in Boston, Massachusetts. Sahni is a senior researcher in the Department of Economics at Harvard University.  ‘We conclude that a host of fundamental changes – including less rapid development of imaging technology and new pharmaceuticals, increased patient cost sharing, and greater provider efficiency – were responsible for the majority of the slowdown in spending growth,’ said Cutler and Sahni. ‘If these trends continue during 2013-22, public-sector healthcare spending will be as much as $770 billion less than predicted. Such lower levels of spending would have an enormous impact on the U.S. economy and on government and household finances.’”

According to a Harvard Gazette article: “If the growth in costs remains flat, Cutler said, companies could direct savings on health care back to workers in the form of increased salaries. Reduced health care costs could also help relieve financial strain on critical government programs…With the passage of the Affordable Care Act, Cutler said, health care providers received new incentives to increase efficiency and reduce costly problems…Steep out-of-pocket costs have also resulted in many people — even those who are insured — choosing to defer some treatments.  ‘A typical insurance policy now has a deductible of over $1,000 for an individual, and maybe $2,000 for a family, and most people don’t have that amount of cash in the bank,’ Cutler said. ‘It’s a big hurdle. People look at their cost sharing, and they say, this is a lot of money, I’m not sure I can afford it, so they’re cutting back on discretionary imaging, they’re cutting back on elective surgeries, and on referrals to specialists that might not be covered…if we continue to do the right things, like stressing efficiency and helping people choose less expensive alternatives, then we can make sure this trend continues.'”

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