Who Should Get Credit for the Slow Down in Health Care Spending?

File photo of an Obamacare pamphlet at a Tea Party rally in LittletonThe administration and not a few people in the press are fond of claiming this as a victory for President Barack Obama’s Patient Protection and Affordable Care Act, aka ObamaCare. The program is so fantastic on cost control, the argument goes, that providers have naturally started to control costs in preparation for the actual implementation. Authors Amitabh Chandra, Jonathan Holmes and Jonathan Skinner dismiss this explanation. Most of the cost controls haven’t kicked in yet, while one cost-increasing factor (the expansion of private insurance coverage to children under 26) has already taken effect. More importantly, as they note, “the downturn in health-care cost growth began in 2006, back when Barack Obama was still a relatively unknown senator from Illinois.”

Megan McArdle: Health-Care Costs Are Driven by Technology, Not Presidents.

Study: Is This Time Different? The Slowdown in Healthcare Spending.

Comments (20)

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  1. Billy says:

    Politicians will always take credit for the circumstances surrounding their time in office, whether or not they had anything to do with them.

  2. Jackson says:

    I suppose ACA could theoretically incentivize a company to lower their costs now in anticipation of the future, but the best way of testing for that would be to see if the companies are self-implementing the controls that have yet to kick in.

    • JD says:

      Right. It is possible that ObamaCare is doing some short term good, but once everything kicks in, those gains will be negated.

  3. Stewart T. says:

    As long as it slows down, that’s the important thing. Who or why is just politics.

  4. Adam says:

    The continued use of the press as a propaganda tool by the Administration is what is worrying to me.

    • JD says:

      Every administration has done the same. It should bother you more that so many people don’t see through it.

      • Adam says:

        What bothers me is that the press has a singular ideological goal. If they were simply the pawns of whomever was in power it would be easy to see through, i.e. China.

  5. kingstu says:

    As a Libertarian, I am hopeful the ACA will accidentally control costs by increasing high deductible plans and moving insurance away from employment and toward the individual market. If every employer adopted the plans at Safeway and Whole Foods (sort of a private alternative to the Singapore healthcare system) we would be much better off.

  6. John R. Graham says:

    I would disagree with Megan McArdle (with whom I almost always agree fully) in describing Medicaid’s failure to provide adequate access to care as almost politically acceptable because it affects only a small and politically powerless part of the population.

    As government expands its control over access to health care, it becomes increasingly difficult for the shrinking majority to resist. In Canada to take the extreme example, the entire population is in what is effectively a Medicaid program (although it is not named such). The affluent escape its consequences through outbound medical tourism.

    But there has been little success in changing the status quo, despite efforts by groups like the Fraser Institute, which have demonstrated the failures of the system through measurement.

  7. Greg Scandlen says:

    The slow-down actually began in 2002. Wish I could paste a graph here.