Is health spending actually slowing?

A recent Economist article shined a light on the elephant in the healthcare debate room: spending growth. On January 6, 2014, the Centers for Medicare and Medicaid Services (CMS) showed that 2012 healthcare spending grew more slowly than did the US GDP. Healthcare spending in 2012 grew by 3.7% for a total of $2.8 trillion. Earlier in the last decade, healthcare spending grew annually at roughly 10%.  

 

Trend or Aberration? 

The Congressional Budget Office tells us that continued growth in healthcare spending threatens the country's fundamental economic health. The stakes are huge.  A Harvard report last year suggested that the recession accounted for just one-third of the healthcare spending slowdown. Half of the reduction came from more sustainable changes such as increased out-of-pocket payments by individuals (and thus a lower willingness to consume) and greater efficiency in care delivery. If these trends continue, the government's health spending will be reduced by $770 billion over the next decade.

 

Is Obamacare driving costs down?

An article in Health Affairs showed that per capita health spending growth from 2009 to 2011 was half of what is was for the prior ten years. Not only do the authors point to the impact of increased out-of-pocket obligations, but also to the deflationary impact of the "pay for quality" programs that provide incentives to deliver better care at lower costs. Since much of the pay-for-quality provisions in Obamacare will influence the 2013 spending numbers, we may soon know if these programs are truly a deflationary counter force on spending growth.

 

Chronic Disease

A sustainable reduction in US health spending requires keeping chronic disease patients engaged and well. The following statistics come from the US Department of Health and Human Services and the Centers for Disease Control and Prevention:

  • 45% of US adults have 1 or more chronic condition.
  • 25% have 2 or more chronic conditions, which drives 66% of healthcare spending.
  • 75% of adults over age 65 have 2 or more chronic conditions.
  • 7 out of 10 deaths among Americans each year are from chronic diseases. Heart disease, cancer and stroke account for more than 50% of all deaths each year.
  • In 2005, 133 million Americans – almost 1 out of every 2 adults – had at least one chronic illness.
  • Obesity has become a major health concern. 1 in every 3 adults is obese and almost 1 in 5 youth between the ages of 6 and 19 is obese (BMI ≥ 95th percentile of the CDC growth chart).
  • About one-fourth of people with chronic conditions have one or more daily activity limitations.
  • Arthritis is the most common cause of disability, with nearly 19 million Americans reporting activity limitations.
  • Diabetes continues to be the leading cause of kidney failure, nontraumatic lower-extremity amputations, and blindness among adults, aged 20-74.

 

How Patient Engagement Can Help

The next chapter in this story will highlight how patients and providers collaborate to bend the cost curve. In a series of posts, we explore how patient engagement -- specifically mHealth -- can help chronic disease patients develop healthy behaviors and take control of their health:

Diabetes

Kidney Disease

Heart Failure

Hypertension

Heart Disease

 

Further reading:

Mobile Health ROI Part 1: Readmissions

Mobile Health ROI Part 2: HCAHPS & Value-Based Purchasing

Mobile Health ROI Part 3: Patient Loyalty

Mobile Health and Medicine Reconciliation

Mobile Health and the Closing Window for Patient Engagement