Declining Trend? Look a little closer

By Thomas Emerick

First Posted at Cracking Health Costs on 5/14/2013

Tom Emerick, Host of Cracking Health Costs
Tom Emerick, Host of Cracking Health Costs

An Op/Ed in the WSJ describes how “American health-care spending appears to be slowing down.”  Of course much or most of the decline in trend is caused by the weak economic conditions today.

Some writers are saying this may be part of an underlying slowdown in health care spending in general.  We need to be a bit skeptical of that point of view for several reasons:

  • Trend always abates during periods of layoffs and downsizing. Why? Because such things impact older workers especially. A slight decline in the number of workers over 55 will cause a big but temporary decline in trend.  (Whenever I’ve heard a company report a sharp drop in trend caused by their new wellness program, an employee education initiative, or whatever, the first thing i ask is if they have had any ten percent staff reductions recently. Usually they either have or their numbers are too low to be credible.)
  • Such reports are usually measuring net trend not gross trend. Gross trend is trend before increases in deductibles, etc. True trend can be camouflaged if you’re raising deductibles and out of pocket maximums.
  • When ACA hits trend will surge in a way we have never seen before.

Beware of those who say the rate of growth in health care prices and spending may be permanently rebased.

Click here to read the full article.

Patricia Salber MD, MBA (@docweighsin)
Patricia Salber, MD, MBA is the Founder and Editor-in-Chief of The Doctor Weighs In. She is also the CEO of Health Tech Hatch, the sister site of TDWI that helps innovators tell their stories to the world. She is also a physician executive who has worked in all aspects of healthcare including practicing emergency physician, health plan executive, consultant to employers, CMS, and other organizations. She is a Board Certified Internist and Emergency Physician who loves to write about just about anything that has to do with healthcare.

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