In news that appears to buck the public’s understanding of health-care trends, S&P’s Healthcare Economic Indices reports that the increase in per-capita Medicare costs has slowed. The report revealed that the growth in per-patient Medicare revenue–the revenue that Medicare generates for health-care providers–has slowed to 2.5 percent. That’s the slowest rate since S&P Indices started keeping records six years ago. Private insurance companies also saw a drop in their growth rate, although by not as much.
The disparity between Medicare and private health insurance growth rates is not surprising; the Center on Budget and Policy Priorities has shown that to be the case for decades. However, lately, the divergence has become more marked.
Experts speculate that the slowdown in growth could be caused by the economic recession, which makes patients less likely to go to the doctor. Furthermore, the recession and a public debate over federal spending may have made Medicare less likely to rush to cover the latest medical technologies, which can drive up the cost of care. Private insurers, on the other hand, must compete with one another regardless of the economic climate, which can drive up their costs, while Medicare does not face those pressures.
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