J.D. Kleinke, a healthcare economist with the American Enterprise Institute, says higher deductibles, co-pays and premiums have been slowing cost growth by forcing healthcare consumers to be frugal.
"The 10-year trend is that healthcare is normalizing," Kleinke told HealthLeaders Media. "The standard deductible 10 years ago was $200. That was the same deductible as in the 1950s. The deductible for health insurance didn't change during a time when everything else in the economy went up by an order of magnitude. The health insurance industry accommodated a huge amount of waste. People used it more than they needed and physicians were more than happy to deliver more care than needed because it was somebody else's money."
"It took 20, 30, 40 years to get out of control. Then the reaction in the 1990s was to blame the doctors and the hospitals and beat them up and do this utilization review stuff, and that didn't work. Now for the last 10 years it's been the demand side," Kleinke said.
The S&P indices also show that month-to-month healthcare cost growth accelerated in December, up from +4.85% in November to +5.28% in December. Commercial plan costs increased from +6.63% in November to +7.11% in December, while Medicare costs increased from +2.15% in November to +2.51% in December.
David M. Blitzer, chairman of the Index Committee at S&P Indices, said in the report that costs are trending back toward acceleration after a lull in November.