Slow down due to changes in the behavior of beneficiaries and providers.
According to a blog by Doug Elmendorf, director of the Congressional Budget Office (CBO), growth in Medicare fee-for-service spending has slowed significantly in the past few years. He attributes the slow down not to the recession but changes in the behavior of beneficiaries and providers.
The blog is not specific on the behaviors that affected the curve but notes average payment rates have fallen 0.2% since 2000, and changes in age and health status have produced a 0.3% drop in spending.
Elmendorf says the slowdown has lasted for several years and is not “just a flash in the pan.” Multiple programs were examined so the trend does not appear to be an isolated development, he says.
Federal spending for Medicare, Medicaid, the Children’s Health Insurance Program equaled less than 3% of GDP on average during the past 40 years. It is 4.5% of GDP for 2013 and estimated at 6% of GDP in 2023 and 8% in 2038. In 2014 and beyond, federal spending will also include exchange subsidies. Federal spending growth on Medicaid is projected at 1.3% per year.
He says three things that will drive increased federal spending over the next 25 years include:
· Aging of the population (35%)
· Expansion of coverage under the Affordable Care Act (25%)
· Excess cost growth (40%)
Upended: Can PBM Transparency Succeed?
March 6th 2024Simmering tensions in the pharmacy benefit management (PBM) industry have turned into fault lines. The PBMs challenging the "big three" have formed a trade association. Purchaser coalitions want change. The head of the industry's trade group says inherent marketplace friction has spilled over into political friction.
Read More
In this episode of the "Meet the Board" podcast series, Briana Contreras, Managed Healthcare Executive editor, speaks with Ateev Mehrotra, a member of the MHE editorial advisory board and a professor of healthcare policy and medicine at Harvard Medical School. Mehtrotra is also a hospitalist at the Beth Israel Deaconess Medical Center in Boston. In the discussion, Contreras gets to know Mehrotra more on a personal level and picks his brain on some of his research interests including telehealth, alternative payment models and price transparency.
Listen
Inflation Reduction Act: Reforms to Patient Cost-Sharing
September 18th 2023Lower out-of-pocket costs for patients might put upward pressure on drug prices, as manufacturers face less price sensitivity, note Matthew Majewski and Rhett Johnson of Charles River Associates. But they also note that upward pressure on price is likely to be limited to the inflation rate as any additional price increase would need to be paid back to CMS in the form of inflation rebates.
Read More
Spending climbed by 2.7% in 2021. In 2020, it soared by 10.3%, fueled by federal government spending in response to the pandemic. The blizzard of calculations of 2021 healthcare spending by CMS’ actuaries also provides further evidence that utilization of healthcare services bounced back in 2021.
Read More