Healthcare Cost Slowdown Could Save $770 Billion
People with health insurance saw increases in their medical
costs slow from 2009 to 2011, signaling potential structural
changes in the industry that could cut healthcare inflation
and save the U.S. hundreds of billions of dollars, according
to two studies. The studies aim to shed light on why the
annual growth of medical spending slowed from a high of
about 8.8 percent in 2003 to an average of about 3 percent
per capita from 2009 to 2011, according to data reported in
January by the U.S. Centers for Medicare and Medicaid Services.
A study by Harvard University health economist David Cutler
and Harvard Medical School healthcare policy professor
Michael Chernew, published in Health Affairs, reveals that
medical costs for people with health insurance grew at a
slower rate from 2009 to 2011, attributed to increased use
of generic drugs, higher out-of-pocket costs, and improvements
in care efficiency, in addition to the recession. Around
37 percent of the slowdown in health costs from 2003 to 2011
could be attributed to the recession, 8 percent to a decrease
in private insurance coverage and Medicare payment cuts, and
55 percent to structural changes. If the trend continues, the
U.S. may recapture $770 billion in unexpected savings from
projected expenditures by 2021, wiping out a fifth of the
federal budget deficit.
Healthcare Cost Slowdown Seen Saving Up to $770 Billion
Market Scout: Commercial P/C Rates Rose 5% in April
Commercial property/casualty insurance rates rose an average
of 5% in April over those of the same month a year earlier,
Dallas-based electronic insurance exchange MarketScout reported.
Commercial property and workers compensation experienced the
most significant rate increases at 6%. Surety and employment
liability insurance rose the least at 2% each. Among classes
of business, manufacturing increased the most at 7%, while
energy and public entity accounts enjoyed the smallest
increases at 4% each.
The market is bumping along in a continued slow but steady
path toward overall increases," said MarketScout CEO Richard
Kerr in a statement. "For the rest of 2013, we expect some
months with lower composite increases than prior months,
but the general direction of rates will be upward, unless
new capacity enters the market."