High-priced technology—not the economy and not healthcare reform—has the most potential to drive U.S. health spending growth upward in the years ahead, a new analysis published by the Brookings Institution (PDF) has found.
Economists at Harvard University and Dartmouth College said pricey brand-name drugs and capital-intensive technology are “the primary determinant of long-term growth.” They also said that despite sluggish spending on prescriptions in recent years, “there is little evidence of slowdowns in the technology pipeline.”
Policymakers and economists continue to puzzle out the record slowdown in health spending, now in its fifth year, and to worry about whether spending growth will take off again. Any speedup in costs would have serious consequences for household budgets, employers and federal and state government budgets. The Great Recession and the soft economic recovery have been named frequently as key factors behind the slowdown in U.S. healthcare spending; costs have grown just 3.9% a year since 2009. Other research has credited public and private efforts to make healthcare delivery more cost-efficient.