The flat growth could be puzzling in light of the national expansion of health insurance underway since January. Through June, the number of uninsured has dropped 22%, or roughly 8 million adults. Millions bought health plans sold through exchanges with many waiting until the last weeks and days to buy coverage, raising speculation that the newly insured would begin to seek out hospitals and doctors in the late spring and early summer.
Current estimates appear to suggest otherwise. But the bureau figures are preliminary and will be revised twice in coming months. And as revisions to the first quarter—from an initial guess of 10% growth to the final estimate of a 1.4% contraction—illustrates the figures can be significantly revised. Estimates were made more challenging this year by the harsh winter, which dampened overall consumer spending, and the difficult work of predicting how the newly insured will behave as novice healthcare consumers.
Economists reacted to Wednesday's figures with caution. “There is a lot of uncertainty,” said David Dranove, a health economist with Northwestern University. “We should adopt a wait-and-see attitude.” Larry Levitt, who helps lead the Kaiser Family Foundation's health reform and insurance program, went public with his skepticism on Twitter. “I could try to explain why health spending was flat in Q2,” he wrote. “But I think I'll save my brain cells for the revision.”
Charles Roehrig, an economist and director of the Altarum Institute's Center for Sustainable Health Spending, said he expects that revised estimates will show faster health spending growth. Overall economic growth, better weather and reports by health systems of newly insured patients suggest the latest estimate may be too low.
Health spending contributed 0.08 percentage point to the economy's welcome 4% annual rate growth in the second quarter.
The figures reflect spending by consumers for health services, but exclude other contributors to the nation's overall healthcare costs, such as pharmaceuticals, medical equipment, hospital capital investments and research.
After adjusting for inflation, annualized health spending increased by slightly more than 0.7% between the first two quarters of the year. Second-quarter annualized spending compared with the same three months in 2013 increased 1.5%.