- The U.S. is on course to spend $2.6 trillion less on healthcare from 2014 to 2019 compared to the amount projected following the passage of the Affordable Care Act in 2010, reported a new study by the Urban Institute and funded by the Robert Wood Johnson Foundation.
- The researchers based their findings on health expenditure data from CMS and said they adjusted each year for the absence of the sustainable growth rate system for physician payment rates in Medicare.
- The report goes further to explore possible causes for the projected decrease and whether it is likely to persist.
Whether or not healthcare spending will continue on its path of slowed growth likely depends on whether the slowdown has primarily been driven by the Great Recession and a slow economic recovery, as CMS officials have suggested, or whether it has been driven by factors around healthcare policy that can be expected to continue into the future, the researchers concluded.
“There are many potential drivers of the recent slowdown in spending growth rates, and no one can be sure how MACRA may impact spending going forward,” REJF's Kathy Hempstead stated. “If this healthcare spending growth slowdown continues, spending will be trillions less before the end of the decade."
CMS actuaries have assumed the economy is primarily responsible for the slowdown and therefore higher growth rates can be expected to return in the event of a robust economy. However, there are multiple ways the ACA could have contributed to the lower projections, the RWJF report argued, including:
- Impacts on utilization from payment adjustments implemented in 2011;
- Lower Medicare payment rates possibly influencing lower rates from other payers;
- Possible influence from Medicare policies, such as penalties for readmissions, on other payesr; and
- Premiums for marketplace plans being lower than expected due to competition and narrow networks.
The reported added so far CMS has not attributed any cost reductions to accountable care organizations, medical homes, or other delivery system reforms that have been growing in recent years.
"If the ACA and other factors discussed above have contributed to slower spending growth in unmeasured ways, then slower growth may persist beyond current projections," the report concluded. "But if the economy was the primary driver of slower growth, then we should expect a return to faster growth with a robust recovery."