Is the Health Care Cost Curve Bending?
Posted at 2:30 p.m. on Feb. 22
The latest projections by the Congressional Budget Office dramatically lowered expectations for the cost of Medicare and Medicaid, leading David Cutler and Nikhil Sahni to wonder whether this was a one-off event or part of a broader trend.
“Many of the traditional cost drivers that would feed a return to higher growth—price increases, administrative expenses, rapid technological change, and delivery inefficiencies—are weaker than they have been in some time.”
“All of these health system factors suggest that the health care cost curve may be bending more rapidly than official forecasts project… a fair reading of the evidence argues at least as strongly for a long-term bending of the curve as for a short-term reduction… If Medicare cost increases slow as they have recently, the savings through 2023 will be $363 billion over even the new CBO forecast.”