The recent slowdown in the growth of healthcare spending has led analysts to question whether, and to what extent, the phenomenon resulted from predictable factors such as the Great Recession, or resulted from some new structural change in the healthcare sector, possibly related to the Affordable Care Act (ACA). The answer could be critical to projecting the likely future pattern of spending for medical care with the ACA in place.
A new study funded by the Mercatus Center at George Mason University offers an important potential explanation for recent healthcare spending trends. In a paper published in the journal Inquiry, professors Bradley Herring from Johns Hopkins University and Erin Trish from the University of Southern California use a method of analysis not previously applied to this question and find that at least 70 percent of the recent slowdown in healthcare spending growth—if not all of it—results from predictable, known factors such as income, insurance coverage, and provider market characteristics. The authors also apply these results to project the likely healthcare spending increases from the Medicaid expansions of the ACA.
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