Budgets remain pinched in households and boardrooms everywhere, and now there's a new, national study that confirms what many have been suspecting for more than two years: Americans have tamped down their appetite for healthcare spending.
Spending on private health insurance benefits totaled $746 billion in 2010 and increased just 1.6 percent over the previous year, the lowest rate of increase in the history of the 51-year-old National Health Expenditure Accounts from the Centers for Medicare & Medicaid Services. Moreover, the spending growth from 2009-2011 from all sectors among private insurers and government marked the two slowest years of growth ever during the same five decades.
The study published in Health Affairs cites several reasons for the slowdown: the economic recession, greater cost sharing imposed on individuals, and a significant shift to generic drug use because of branded drug patent expirations. Medical goods and services are generally viewed as necessities, but the recession led consumers to be a lot more cautious about utilizing them, said CMS economist Anne Martin, the article's lead author.
The study's release may be coming at a good time for supporters of healthcare reform, which promises to push millions of Americans onto insurance rolls. If the study's conclusions point to a new normal in which Americans have learned to adapt to less healthcare consumption then some would argue we might be better able to afford the total healthcare tab. Of course, another way to look at the slowdown is that Americans have just put off elective procedures, and that by 2014, they'll get that knee surgery just in time for healthcare reform's big expansion.
For years, the American healthcare system has been based on employer-provided health insurance. Now, individuals are responsible for greater and larger percentages of their premiums, along with large deductibles, coinsurances, and, for those lucky enough to be in a copay world, larger copays. Over the past three years, Medicare and Medicaid enrollment has been growing, but private insurance rolls have not.
If 32 million Americans eventually gain coverage through Medicaid programs and the new health benefits exchanges, the U.S. market will tilt even more significantly to insurance managed by individuals, rather than employers. The tide may have already turned, based on the new statistics. For providers, pharmaceutical companies and insurers, it is definitely the time to figure out how this shift of control affects the way they deliver and manage care.