Implementing Health Reform. March 23, 2016 marks the sixth anniversary of the signing of the Affordable Care Act. This week the Department of Health and Human Services (HHS) is releasing a series of blog posts publicizing the successes of the ACA. On March 22, the HHS Assistant Secretary for Planning and Evaluation released a report on Health Care Spending Growth and Federal Policy under the ACA.
The report notes that national health care spending per person increased moderately at a rate of 4.3 percent in 2014. Much of this growth was attributable to the high costs of covering the newly insured, which may in part be attributable to pent-up demand. Spending per enrollee for 2014 for previously enrolled individuals increased more slowly. Spending per enrollee for Medicare enrollees increased 2.4 percent while per enrollee spending for private insurance market enrollees increased 2.9 percent. Spending per enrollee for Medicaid enrollees actually decreased by 3.6 percent. Even though the 4.3 percent increase is higher than increases in the recent past, it is still lower than increases in the years leading up to 2009. It was also accompanied by an uptick in the growth of the economy generally during 2014.
Trends in Medicare spending growth have been particularly muted since the adoption of the ACA. Between 2009 and 2014, Medicare spent $473.1 billion less on personal health expenditures than it would have spent had average growth rates between 2000 and 2008 continued. HHS estimates that the Medicare expenditure growth rate for 2015 will only be about one percent, leading to a cumulative reduction in health care spending of $648.6 billion between 2009 and 2015, greater than total 2015 Medicare spending of $637.2 billion.
Expenditure growth has slowed both in traditional Medicare and Medicare Advantage. Inpatient and post-acute Medicare spending growth has been flat. Higher expenditure growth rates in outpatient facilities and professional services likely reflect the continued movement in site of care from inpatient to outpatient. The biggest growth, however, has taken place in Medicare Part D spending. Prescription drug spending increased 9.1 percent in 2013 and 13.7 percent in 2014.
Indeed, increases in the cost of prescription drugs, and in particular specialty drugs, has been one of the biggest factors driving health care expenditure growth in 2013 and 2014, accounting for 56 percent of per enrollee spending growth in Medicare and 47 percent in private health insurance. The prescription drug spending growth rate for traditional Medicare would have remained the same in 2013 and 2014 had it not been for new Hepatitis C drugs which drove spending up dramatically. Although offering a dramatic improvement over previous treatments for Hepatitis C, the new drugs cost Medicare fee-for-service $2.5 billion in 2014, driving the spending growth for part D up by 4.5 percent above what it otherwise would have been.
A new class of anti-cholesterol drugs called PCSK-9 inhibitors could dramatically further increase drug expenditures. 42 million adults use cholesterol-lowering medications, and if the new drugs replace statins, which are widely used currently but are poorly tolerated by some patients, expenditures on these drugs could exceed $100 billion a year, compared to total drug spending on prescription drugs of $297.7 billion in 2014.
The ASPE report does not claim that the ACA was responsible for all of the decrease in spending growth over the past half decade. It recognizes that the slowdown in spending since 2009 has been driven by a number of factors unrelated to the ACA: the slow recovery from the recession, expiring prescription drug patents and a corresponding increase in the use of generic drugs, ongoing shifts in the site of care from inpatient to outpatient settings and to prescription drugs, and a greater emphasis on enrollee cost sharing in private insurance plans. But the report asserts that some credit must be given to the ACA for reductions in Medicare provider payment updates and Medicare Advantage payment rates, purchasing reforms, increase program integrity efforts, state Medicaid cost containment, and shifts in coverage to public programs which have also contributed to slowed expenditure growth.
from Health Affairs Blog http://ift.tt/1Rj6zWC
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