Good news: Healthcare spending slowing down, may help GDP
Over the years, healthcare spending has taken up a large portion of the U.S. economy's gross domestic product (GDP). Additionally, the U.S.'s proportion of GDP spent on healthcare continues to rise faster than any other developed nation.
Yet there is a silver lining: Healthcare spending is slowing down.
Over the summer, the White House Council of Economic Advisers, citing data from the Bureau of Economic Analysis (BEA), concluded that healthcare spending dropped at a 1.4 percent rate during the first quarter of 2014, FierceHealthFinance previously reported.
So, this is good news for the GDP, according to a recent Health Affairs blog post.
If healthcare spending continues to decline, this will improve the long-term economic health of the country, notes the authors.
But of course, healthcare still is to blame for the U.S. not coming out of the recession quicker--health insurance costs are high, and hiring workers for the health insurance industry does, in fact, rack up the costs.
The authors pose an important question in their post: Will this spending trend continue?
If consumers continue to enroll in high-deductible plans, then yes, it's possible this could help reduce overall healthcare expenditures. The reason is because high-deductible plans expose individuals to increased cost-sharing, which may, in turn, make the consumers more aware of certain services, according to the blog post.
What's more, as the industry as a whole shifts its focus on changing the efficiency of the healthcare delivery system, this will also help drive down costs. The authors note that by improving quality and cost dimensions, this may cause a reduction in healthcare workers, or perhaps enable the employment of lower-wage workers.
- here's the blog post
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