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Wednesday, August 28, 2013

Medicare Spending Growth Has Slowed, But CBO Doesn’t Know Why

by Nathaniel Weixel

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Growth in spending per beneficiary in fee-for-service Medicare slowed considerably between 2007 and 2010, and while that’s not a bad thing, the Congressional Budget Office isn’t sure why it’s been happening. However, they do know what isn’t causing the slowdown: the recession

In the Aug. 23 report, CBO put to rest any idea that the economic slowdown led to a similar slowdown of Medicare spending. “Although the elderly as a group faced substantial declines in home values, significant losses in financial assets, and slower income growth, we could not identify a relationship between those factors and the amount of health care used by elderly [fee for service] Medicare beneficiaries through 2010,” CBO said.

CBO speculated that at least some of the spending drop could be contributed to providers changing the methods of how they deliver care. Providers may have improved care management practices, reduced the number of services delivered to patients during an episode of care, or may have just slowed their adoption of cost-increasing technologies. CBO was able to conclude that providers have not been reducing services, since there was no discernible diminished access to care.

CBO did note the slowdown persisted, and perhaps even intensified, after the study ended in 2010, which they said is consistent with the agency’s recent forecast of Medicare spending growth, which projected slower growth over the next few years than previous forecasts anticipated.
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