The "Slow" Rise of Health Care Spending

September 5, 2014

Yesterday, a new report from the Center for Medicare and Medicaid Services (CMMS) was released stating that national health care spending is in fact slower than previous decades, but still rising.

Let’s look at the numbers. The report says that the growth will average 6% in the next nine years, which is lower than the 7.2% spending in 1990 to 2000. However, while the rate was reported at 3.6% in 2013, it is expected to rise sharply to 5.6% for 2014.

So many numbers, so little time. What do all these numbers and percentages really mean? It means that while many are quick to look at the slow growth rate and celebrate, they fail to see the overall picture that health care spending is STILL rising and celebrating slow growth rates may be a little premature considering the reasons behind it.

There are a few main reasons for the slow growth, but we find one that as a consumer-patient, you probably won’t like. It is no secret that many people have found their deductibles rise in the past few years, meaning they are paying more of their share for health care. This payment shift from health insurance plans to consumers means you are paying more out of pocket so you, like many others, are little more wary of having to spend your hard earned money on health care. You are avoiding the doctor even though you may really need the care.

Another reason to hold off on celebrating: even though it is a slow rise in spending, it is rising fast enough to mean that health care will make up almost 20% of the United States economy by 2023. That’s $5.2 trillion. Not pocket change.

Now as the economy is picking up and health care spending rates expected to rise, it is time to look at what you can do as a consumer-patient, with or without a high-deductible plan, to help control costs and keep them as manageable for you as possible.

  1. Ask questions and engage in conversation with your doctor – As we featured in our blog post last week, having meaningful conversations with your doctor can be the difference between minor and major medical charges.

  2. Research – Time and time again, we have seen how when presented with prices, consumer-patients do research and think twice about where we are going for care and often choose a low-cost provider, which in turn made other providers lower their prices.  In fact, there was a recent study in which the findings echoed this idea. And while both price and quality transparency resources are far and few between, being diligent about calling providers and your health plan to figure out the cost of a procedure can really pay off.

  3. Demand transparency – As mentioned above, health care transparency resources are scarce, but we know that consumers can and will use them to help make decisions. We need to demand these tools and resources in a big way. By writing to your representative or becoming a transparency advocate, you can be a part of moving this from discussion to action!

In reality, these steps take work, precious time and patience. But think about the alternative: paying more for less care. And that is something we can’t afford to sustain.

So while, yes, it is good that the spending growth rate has slowed, it doesn’t mean much when it shouldn’t be “growing” at all.
Joshua Archambault, director of health care policy at the Pioneer Institute, said it best when he told the Boston Herald: “It’s like you’re gaining weight, but you only gained 10 pounds instead of 20. Really, you shouldn’t be gaining any weight at all.”