After five years of historical lows for healthcare inflation, rapid growth has returned. From 2009 – 2013 healthcare spending showed average annual increases of 3.9%, but 2014’s jump of 5% indicates that the slowdown is over. I predicted this trend in a December blog, writing that healthcare spending increases in 2013 was at an historic low, but with a caveat: this dip was likely temporary.
While the Administration has taken credit for leveling healthcare spending, it seemed to me that depressed trends in costs have been driven by a bad economy and uncertainty by consumers about whether their new healthcare plans will pay the bills. Intuitively, deferral of care can only last so long and it appears that we have reached the end of the flat line.
And now that ACA resulted in an increase to the number of insured Americans, it’s not a surprise that spending must go up. The influx of new drugs – particularly the expensive ones like Sovaldi which carried early 2014 predictions about driving up spending – has undoubtedly also played a role.
Trend has come back…I am awaiting affordability.