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Friday, January 8, 2010

What do the numbers mean?

A few days back, health care spending numbers for 2008 were released. As expected, the numbers increased-however, they increased at a slower rate than predicted.

That means that we don't need health care reform, right? Hardly.

The smaller increase in this rate can be attributed to the recession and we can expect health care costs to continue to rise. According to The New York Times,

... federal officials said the deceleration in health spending was a result of the soft economy, and they did not cite any factors that would alter the long-term outlook for continued increases in health spending as baby boomers age and doctors make greater use of new medical technology to treat patients.

The hard reality is that many people lost their jobs since 2008 and, as a result, lost their health coverage. Without coverage, people could not visit the doctor regularly or get needed treatments, which caused a deceleration in private health care costs.

Reciprocally, many Americans had to jump onto state-sponsored programs due to the economy. According to Micah Hartman,

In 2008, federal Medicaid spending increased 8.4 percent-the highest rate of growth since 2003-while state spending declined by 0.1 percent, the first decline in these expenditures in program history.

Therefore, do not be fooled by this report. Just because the rate of spending has increased at a slower rate, it still increased significantly during the recession, and Americans are clearly not healthier because of it.