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The $2.7 trillion question: Are health-care costs really slowing?

The Washington Post

Monday, January 7, 2013



It is, unquestionably, the most important question in budget policy: How quickly will health spending grow?

For decades, health-care costs have grown faster than the rest of the economy. That has required the federal government to devote an ever-growing chunk of its budget to health insurance programs. That is the simple, central fact behind our long-term budget problem…

But something weird started happening in 2009, something that throws all of our budget debates into question: Health spending growth slowed.

During the economic downturn in 2009 and 2010, health-care costs grew at their slowest rate in decades. New data released Tuesday showed that slowdown continuing through 2011, with health-care spending growing by 3.9 percent for the third consecutive year. 

Health-care costs grew slower than the rest of the economy in 2011 for the first time in more than a decade. For health policy analysts, that’s huge: When they try to get really aggressive on controlling costs, they usually aim for cost growth that is 1 percent higher than the rest of the economy.

2013-01-07 00:00:00
The Washington Post