Health care spending since the 2010 passage of the Affordable Care Act has risen by 1.3% a year, the lowest rate ever recorded, and health care inflation is the lowest it has been in 50 years, a report released Wednesday by the White House shows. An economy hobbled by the recession and 2008 economic crisis played a role in some of the reduced spending growth, officials said, but the report cited "structural change" caused, in part, by the law.
"The fact that the health cost slowdown has persisted so long even as the economy is recovering, the fact that it is reflected in health care prices -- not just utilization or coverage, and the fact that it has also shown up in Medicare -- which is more insulated from economic trends, all imply that the current slowdown is the result of more than just the recession and its aftermath," the report stated. "Rather, the slowdown appears to reflect 'structural' changes in the United States health care system, a conclusion consistent with a substantial body of recent research." The ACA is a contributing factor because it includes reductions in Medicare overpayment to private insurers and medical providers, and incentives for hospitals and doctors to improve their quality of care, the report stated. "Recent research implies that reforms to Medicare will have 'spillover effects' that reduce costs and improve quality system-wide," the report stated. "Accounting for 'spillovers' implies that the ACA's effect on health care price inflation may be much larger than previously understood."