New CMS report expected to show continued low spending growth

This week's release of federal data on U.S. healthcare spending growth for 2012—the latest data available—likely will show medical inflation near the historically low level of 3.9%, where it has hovered since 2009, experts say. Last October, the CMS projected 3.9% growth for 2012. The agency will release an updated National Health Expenditures report.

The historic slowdown followed the Great Recession, and economists and policymakers have debated the cause while welcoming the flat trend. But how long it will last remains unclear. The slow-recovering economy is widely considered a major factor, but many experts think Obamacare cost-control initiatives, care reengineering by the healthcare industry and higher patient cost-sharing also have played a role.

Uwe Reinhardt, a professor of political economy at Princeton University, said spending growth remains modest at least partly because the high rate of unemployment has made employed workers fearful of taking time off to receive medical treatment. He also cited the growth of health plans with high deductibles.

Charles Roehrig, director of the Altarum Institute's Center for Sustainable Health Spending, cited the economy as well as reduced spending for prescription drugs.

Mark Pauly, a professor of healthcare management at the University of Pennsylvania, said the uncertainties surrounding healthcare reform slowed investment, and that flattened overall spending. He sees continued hospital hiring as a sign of future spending growth, with prices rising to meet increasing labor costs.

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