The Unassuming Economist

From a new VOX post:

“Growth in life expectancy during the last two centuries has been attributed to environmental change, productivity growth, improved nutrition, and better hygiene, rather than to advances in medical care. This column traces the development of medical care and the extension of longevity in the US from 1800 forward to provide a long-term look at health and health care in the US. It demonstrates that the contribution of medical care to life-expectancy gains changed over time.”

“Researchers agree that there is a recent slowdown in national health expenditures across all age groups (Figure 4), but there is little agreement on exactly why and when it started. Cutler and Sahni (2013) considered the role of the recession and estimated that it accounted for 37% of the slowdown between 2007 and 2012. They noted that a decline in private insurance coverage and cuts to some Medicare payment rates accounted for another 8% of the slowdown, leaving 55% of the spending slowdown unexplained. Researchers who asked whether the Affordable Care Act could explain part of the slowdown reached mixed conclusions about the importance of its contribution (McWilliams et al. 2013, Song et al. 2012, Colla et al. 2012).

Whatever the case may be, the slowdown began in the early 2000s, prior to the implementation of the Affordable Care Act. Chandra et al. (2013) argued that the three main causes for the slowdown were the rise in high-deductible insurance plans, state-level efforts to control Medicaid costs, and a general slowdown in the diffusion of new technology, particularly for use by the Medicare population.

The diffusion of technologies previously used among the elderly to the non-elderly population (e.g. elective hip or knee replacement for people with severe arthritis) might explain some of the relative change but is not the full story. The recent reduction in the relative growth of medical spending on people over 65 and the slowdown in the real growth rate of spending for all citizens remain to be fully understood. ”