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Slowdown in Healthcare Spending Growth - 8/17/15

New projections released by federal government actuaries indicate that the nation’s five year run of small increases in health care spending is approaching its end.  As indicated by writer Margot Sanger-Katz, the projections suggest that health spending growth will average nearly six percent a year through twenty twenty-four, far higher than the four percent annual growth measured between two thousand and seven and twenty thirteen. 

The actuaries tend to believe that the recent slowdown in healthcare spending growth is attributable to the recent economic slowdown rather than to permanent shifts in healthcare finance and delivery.  The implication is that as the economy continues to rebound, healthcare spending growth will re-accelerated.  But they still do not believe that health spending growth will return to the lofty levels experienced prior to the recession – an average of nine percent a year over three decades. 

Not surprisingly, policymakers and analysts continue to scramble to identify ways to suppress healthcare spending growth.  The Obama Administration has begun a series of demonstration programs in Medicare, targeted toward improving healthcare quality while reducing costs.

Anirban Basu, Chariman Chief Executive Officer of Sage Policy Group (SPG), is one of the Mid-Atlantic region's leading economic consultants. Prior to founding SPG he was Chairman and CEO of Optimal Solutions Group, a company he co-founded and which continues to operate. Anirban has also served as Director of Applied Economics and Senior Economist for RESI, where he used his extensive knowledge of the Mid-Atlantic region to support numerous clients in their strategic decision-making processes. Clients have included the Maryland Department of Transportation, St. Paul Companies, Baltimore Symphony Orchestra Players Committee and the Martin O'Malley mayoral campaign.