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Growth in health spending was curbed by recession and will rebound, study says

A new study attributes a slowdown in U.S. health care spending to the recent recession and predicts more rapid growth as the economy strengthens.

The report issued Monday by the Kaiser Family Foundation seeks to shed light on the reasons behind the recent drop-off. The analysis found that economic factors related to the recession accounted for 77 percent of the reduced growth in national health care spending, which totaled an estimated $2.8 trillion in 2012.

The remaining 23 percent resulted from changes in the health care system, such as higher patient deductibles and other changes made by insurers and medical providers, the study said.

U.S. health care spending grew 3.9 percent a year in 2009-2011, according to government data, the lowest growth rate since the government began tracking it in 1960, and down significantly from annual growth averaging 8.8 percent in 2001-2003.

There has been widespread debate among policymakers and health care experts over whether the recent slow growth in spending marked a temporary reprieve or a longer-lasting change.

"The problem of health costs is not solved, and we need to be realistic that health-spending increases will return to more typical levels as the economy improves," said Drew Altman, chief executive of the Kaiser Family Foundation, a nonprofit group based in Menlo Park, Calif.

This analysis predicts the annual growth rate in health spending could return to more than 7 percent by 2019 as economic growth picks up steam.

The study noted that the federal Affordable Care Act is likely to produce a one-time increase in health spending starting next year as millions more people gain private insurance or qualify for Medicaid.

The federal overhaul is also designed to generate savings through smaller Medicare reimbursements to medical providers and insurers, and through other cost-cutting provisions.

Growth in health spending was curbed by recession and will rebound, study says 04/22/13 [Last modified: Monday, April 22, 2013 9:46pm]
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