There is still a great deal that is not known about how the recently-enacted health care reform legislation will impact on businesses and families. We are only now starting to see analyses based on the actual legislation, as opposed to projections based on assumptions about what may be in it. However, most of what will drive health care spending in the near term is structural and demographic and won’t be affected much by the new legislation.
The June issue of Health Affairs was recently posted online . It contains articles on the history of health reform, how the recently passed health care reform bill will reduce the cost curve by Harvard economist David Cutler, and why it will likely increase the budget deficit by former Congressional Budget Office director Douglas Holtz-Eakin.
A June study by the Employee Benefit Research Institute estimates that in 2009 there was $7.1 billion in consumer-driven health plans such as health savings accounts, covering some 5 million workers. The study also has demographic data on those with such accounts.
An OECD study published on May 28 looks at the impact of the recession on the health spending/GDP ratio. It finds that since health spending is relatively immune from cyclical effects, the fall in GDP resulting from the recent recession will likely raise the ratio. Total health spending in the U.S. is projected to rise from 16% of GDP in 2007 to 17.8% in 2010.
Another OECD study published on May 26 looks at the efficiency of public health care spending in terms of health outcomes such as life expectancy. The U.S. is found to be among the least efficient countries, suggesting that there is a considerable room for improvement in health outcomes without increasing spending.
A May 26 Kaiser Family Foundation study suggests that fears that health care reform will cause Medicaid spending to balloon are overblown.
A May 20 Mercer study found that employers expect the recently enacted health care bill will raise their health care costs by an average of 3% next year.
A May 20 article in Health Affairs details changes to Medicare resulting from the recently enacted health care reform legislation.
A May 12 Deloitte report offers advice to employers on how to deal with implementing the health reform legislation.
A May study of health care reform by the American Action Forum, a Republican group, estimates that 35 million workers may lose their employer-provided health coverage, raising the cost of the recently enacted health care legislation by $1.4 trillion more over the first 10 years than forecast by the Congressional Budget Office.
A May paper by Harvard economist David Cutler asks why there is so much inefficiency in the health industry and why new firms don’t come into the industry to eliminate them, making profits by being more efficient than existing firms. He concludes that the two main reasons are public insurance programs that are oriented toward volume of care and not value, and inadequate information about quality of care.
A May study by the National Institute for Health Care Reform, a private group funded by both corporations and labor unions in the auto industry, finds that the $5 billion allocated by the recent health care reform bill to subsidize health insurance coverage for those with pre-existing conditions may only cover 200,000 of the 7 million people potentially eligible.
Bruce Bartlett is an American historian and columnist who focuses on the intersection between politics and economics. He has written for Forbes Magazine and Creators Syndicate, and his work is informed by many years in government, including as a senior policy analyst in the Reagan White House. He is the author of seven books including the New York Times best-seller, Impostor: How George W. Bush Bankrupted America and Betrayed the Reagan Legacy (Doubleday, 2006)
Previous posts from this week:
Focus on Fiscal Stimulus 6/8/2010
