Health Care Spending Grew Slower Than the Economy in 2012

A blog about business and economics.
Jan. 6 2014 4:25 PM

Health Care Spending Grew Slower Than the Economy in 2012

A new report in Health Affairs says that the health care spending slowdown has led to so much slowing down that health care actually shrunk as a share of the economy in 2012. Jeffrey Young has a whole series of charts and graphs breaking down exactly how the changes have happened and delving into the political debate of the hour—does the Affordable Care Act deserve credit?

Not to be Mr. Scoldypants but this actually strikes me as a not-so-important question. (I think the answer is yes, and you can see it's yes because the slowdown was more pronounced in government programs than in the private sector.) The important question is what impact is the slowdown having on the American population. After all, if the policy goal is simply to decrease national health expenditures, then it's really not very difficult. Randomly throwing people off Medicaid will reduce national health expenditures. For that matter, randomly murdering nursing home patients will reduce national health expenditures. Arbitrary price controls will reduce national health expenditures. There are lots of ways to reduce national health expenditures.

But if you propose most of these things not only will stakeholders object, but they'll offer real reasons. For example, murder is morally wrong and therefore murdering nursing home patients is not an acceptable means of reducing health care spending. Draconian price controls might lead to shortages and rationing of access to care.


Which is to say that when national health expenditures fall we ought to ask ourselves what's actually happening. If hospitals are getting better at giving patients proper outpatient care so there are fewer readmissions, then that's important news not just because it reflects an Obama administration policy objective but because people are actually getting better medical care. By the same token, if increased cost-sharing is leading patients to avoid wasteful health care consumption, that's good not because it vindicates a conservative talking point but because people are actually spending their money more wisely. On the other hand, if hospitals are refusing to readmit patients who need more care or middle-class people are going without useful medicine due to cost-sharing, then that's bad.

America's health care system is notoriously inefficient so there's lots of room to cut costs by improving efficiency. But the thing to ask about the slowdown is whether it actually reflects that or not.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.



Talking White

Black people’s disdain for “proper English” and academic achievement is a myth.

Hong Kong’s Protesters Are Ridiculously Polite. That’s What Scares Beijing So Much.

The One Fact About Ebola That Should Calm You: It Spreads Slowly

Operation Backbone

How White Boy Rick, a legendary Detroit cocaine dealer, helped the FBI uncover brazen police corruption.

A Jaw-Dropping Political Ad Aimed at Young Women, Apparently

The XX Factor
Oct. 1 2014 4:05 PM Today in GOP Outreach to Women: You Broads Like Wedding Dresses, Right?

How Even an Old Hipster Can Age Gracefully

On their new albums, Leonard Cohen, Robert Plant, and Loudon Wainwright III show three ways.

How Tattoo Parlors Became the Barber Shops of Hipster Neighborhoods

This Gargantuan Wind Farm in Wyoming Would Be the Hoover Dam of the 21st Century

Oct. 1 2014 8:34 AM This Gargantuan Wind Farm in Wyoming Would Be the Hoover Dam of the 21st Century To undertake a massively ambitious energy project, you don’t need the government anymore.
  News & Politics
Oct. 1 2014 7:26 PM Talking White Black people’s disdain for “proper English” and academic achievement is a myth.
Buy a Small Business
Oct. 1 2014 11:48 PM Inking the Deal Why tattoo parlors are a great small-business bet.
Oct. 1 2014 6:02 PM Facebook Relaxes Its “Real Name” Policy; Drag Queens Celebrate
  Double X
The XX Factor
Oct. 1 2014 5:11 PM Celebrity Feminist Identification Has Reached Peak Meaninglessness
  Slate Plus
Behind the Scenes
Oct. 1 2014 3:24 PM Revelry (and Business) at Mohonk Photos and highlights from Slate’s annual retreat.
Brow Beat
Oct. 1 2014 9:39 PM Tom Cruise Dies Over and Over Again in This Edge of Tomorrow Supercut
Future Tense
Oct. 1 2014 6:59 PM EU’s Next Digital Commissioner Thinks Keeping Nude Celeb Photos in the Cloud Is “Stupid”
  Health & Science
Oct. 1 2014 4:03 PM Does the Earth Really Have a “Hum”? Yes, but probably not the one you’re thinking.
Sports Nut
Oct. 1 2014 5:19 PM Bunt-a-Palooza! How bad was the Kansas City Royals’ bunt-all-the-time strategy in the American League wild-card game?