Health Cost Growth Is Down, Or Not. It Depends Who You Ask.

Mar 05, 2014 | Drew Altman for the Kaiser Family Foundation

Studies show that health care costs have been rising more slowly than at any time in the last fifty years, but the American people think they are rising faster than ever. Who’s right, the experts or the public? They both are, they just look at the problem from different perspectives.

The most recent government study of national health spending was published by the Centers for Medicare and Medicaid Services and found that health spending grew by a very modest 3.7 percent in 2012, the fourth straight year of historically low increases in spending.  Our annual survey of premiums for employer based health insurance in 2013 told a similar story. Premiums rose just 4 percent.  There is debate among experts about how much of the slowdown is due to the weak economy and how much is due to changes in the health care system but everyone agrees both factors have played a role.  The government report says the slowdown is mainly due to the economy.  Our own analysis also found that the economy explains most of the diminishing rate of growth but changes in health insurance and health care have also played a significant role.  There is uncertainty about when and how rapidly costs will accelerate when the economy improves, but no one disputes that the slowdown is real.

No one that is except the American people, who see health costs from a different perspective.  In our monthly tracking poll, almost sixty percent of the American people said “the cost of health care for the nation has been going up faster than usual in recent years”.  Less than a third say costs have been going up “about the same as usual” with just 4 percent saying they were growing “slower than usual”.  No one (correctly) said they were going down.