USA Today had an interesting article on health care spending since enactment of ObamaCare.  In the four years leading to expanded health insurance, the government has used authority in the Patient Protection and Affordable Care Act to try to reshape the economics of health care through regulation and financial incentives. That appears to be keeping a lid on medical costs.  One big change is the government’s revived push toward managed care. The government wants to pay a lump sum for a patient or diagnosis, demand higher standards and expect the medical provider to get the job done for that cost. Rather than cutting reimbursement rates, the government is raising the bar for what it expects for every dollar it spends.

 "Health care spending last year rose at one of the lowest rates in a half-century, partly the result of cost-saving measures put in place by the 2009 health care law, a USA TODAY analysis finds."  "Health care spending hit a record $2.67 trillion last year, but its share of the overall economy shrank, from 17.12% of gross domestic product in 2011 to 17.04%, … an analysis of Bureau of Economic Analysis data found."

"Cost-saving measures under the health care law appear to be helping keep medical prices flat, according to health care providers and analysts."   In 2012, the average price paid for medical care rose at about the same rate as other prices in the economy, an inflation rate of less than 2%.

Also keeping costs lower:

Government insurance. More people are getting health insurance from Medicare and Medicaid, which pay less to doctors and hospitals than private insurers. Medicaid, which pays the least, covers 56 million poor people, up 10 million from five years ago. It will add nearly 20 million enrollees next year.

Generic drugs. About four of five drugs used today are less expensive generic medicines. The nation’s top-selling drug, Lipitor, for high blood pressure, lost patent protection last year.

Competition. Health care exchanges, which start next year, may keep insurance prices down while limiting consumer choice. In early deals, hospitals and doctors are agreeing to lower rates than traditional private insurance in exchange for more volume.

Among the most visible successes are efforts to save money on the most expensive patients by permitting the use of a hospice rather than a hospital for end-of-life care and emphasizing home health care over nursing homes.

 

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