New data released [Monday] by the Office of the Actuary at the Centers for Medicare & Medicaid Services today shows that national health expenditures grew by just 3.7 percent in 2012. That means that the years 2009 to 2012 saw the slowest growth in U.S. health care expenditures since the government started collecting this information in the 1960s. This slow growth coupled with the rebound in the economy resulted in health spending as a share of gross domestic product (GDP) declining to 17.2 percent, the third consecutive year that health spending has held steady or declined as a share of the economy. Stated simply, health spending stabilized over the past four years so it no longer took an increasing bite out of the economy.
Among the most optimistic about these signs is David Cutler, the Harvard economist and former adivsor to President Obama who has written on the subject extensively. "The continued slowness in cost increases, even several years after economic growth has resumed, indicates quite strongly that the health care cost curve is bending," Cutler says. [...] If you cover health care and talk to people in the industry, it's obvious that the law's incentives are having a major effect. Hospitals in particular are reengineering themselves to focus on safety, to make sure providers communicate with each other, and to improve follow-up care after patients are discharged. These changes are happening quickly -- more quickly than many of us expected.