The moderate pace of growth in U.S. healthcare spending that has confounded expectations as millions gained insurance this year may finally be giving way to more robust spending.
Spending for hospital visits and trips to the doctor accelerated in July, August and September after more-modest growth during the first two quarters this year, new survey results from the U.S. Census Bureau show. Spending increased 5.4% during the third quarter compared with the same three months a year ago. That's compared with 3.7% during the second quarter. A cold snap early this year contributed to the first quarter's 2.9% growth from first three months of 2013.
“The third quarter is the first indication that spending is growing a little bit faster, that the acceleration we've been expecting because of expanded coverage is starting to happen,” said Charles Roehrig, director of the Altarum Institute Center for Sustainable Health Spending.
Health spending was widely expected to accelerate from recent record-slow growth with the start this year of new subsidized health plans and Medicaid expansion under the Patient Protection and Affordable Care Act. The moderate growth during the first half of the year has been partially attributed to last winter's harsh weather and consumers who delayed buying insurance.
Last quarter's snapshot is the first this year from the Census Bureau to capture an acceleration in health spending that mirrors the 5.6% projected earlier this year by federal actuaries, who said millions of newly insured Americans and the economic recovery would boost health spending growth. The figure captures spending for healthcare services, but not for goods such as pharmaceuticals.
Third-quarter growth “seems consistent” with expectations for faster spending as millions of newly insured begin to seek medical care, Roehrig said. Hospitals also continue to receive Medicaid subsidies for care to the uninsured. Cuts to those subsidies were scheduled to take effect this year as millions gained insurance, but have been delayed until 2017, he said.
Larry Levitt, senior vice president for special initiatives at the Kaiser Family Foundation, described the survey results as the “most reliable current picture of health spending,” but cautioned that the numbers also are volatile, writing for the Peterson-Kaiser Health System Tracker.
“In fact, we have seen growth rates over 5% in several quarters over the last five years,” he wrote. “While we can read the tea leaves for signs of which way health spending is heading, it is too early to declare that a trend has taken hold.”
The latest Census Bureau estimate shows ambulatory spending increased 4.9% in the third quarter compared with the same three months last year. Ambulatory spending in the second quarter grew 2.4% from the same quarter a year ago.
Spending on hospitals grew more rapidly during the third quarter, up 5.9% from the same three months in 2013. Hospital spending was up 4.9% in the second quarter from the same period a year ago.
The figures will be used to revise the estimates of healthcare's role in the nation's economic growth for the third quarter.
Follow Melanie Evans on Twitter: @MHmevans