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the slowdown in real (that is, inflation-adjusted) health spending growth is
of greater economic interest. Because inflation was, on average, lower during
the 2008-12 period than during the 2001-03 period, the authors’ approach
overstates the role of macroeconomic factors in explaining the slowdown
in real spending growth. In addition, the authors’ model, by virtue of its
relative complexity, is particularly subject to the shortcomings of the time
series approach described above. Indeed, the model estimated by KFF and
Altarum has one particularly unusual feature: the effect of reduced economic
growth on health spending actually peaks four years later. While not impossible,
such lags seem implausibly long.
Non-ACA Factors Affecting Health Spending Growth
As discussed above, the recession does not provide a full, or even
necessarily a major, explanation for the recent slow growth in health spending.
While additional factors may be identified in the future, two non-ACA
factors have received substantial attention to date—although it is important
to note that at least one non-ACA factor is modestly increasing health
spending growth.
The long-term trend toward increased patient cost-sharing is one factor
that can plausibly explain why slow growth has affected many different
categories of spending at the same time (Cutler and Sahni 2013; Ryu et al.
2013; Chandra, Holmes, and Skinner 2013). The Kaiser Family Foundation/
Health Research and Educational Trust Employer Health Benefits Survey
indicates that recent increases in cost-sharing in employer plans have been
substantial; the typical deductible in an employer plan has increased from
$584 in 2006 to $1135 in 2013, a 70 percent increase after adjusting for inflation
(Kaiser Family Foundation 2013a).
Some research suggests that the observed increase in cost-sharing is
having an effect. As noted above, Ryu et al. (2013) examine the importance
of increased cost-sharing in the employer context and conclude that it can
account for 20 percent of the reduction in growth over the 2009-11 period.
Chandra, Holmes, and Skinner (2013) evaluate the role of increased costsharing
using estimates from the literature of how utilization responds to
cost-sharing. They conclude that cost-sharing may have played a larger role,
although the precision of their estimates is limited by the poor quality of the
available data on recent changes in cost-sharing and the current incomplete
understanding of how cost-sharing affects utilization.
While it seems possible and perhaps likely that increased cost-sharing
is playing a role, it cannot be the whole story. As discussed in detail above,
the slowdown in Medicare fee-for-service spending has been even more
dramatic than the slowdown in the private sector, and there have been no
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