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Thursday, December 5, 2013

Weak World Economy, Not ObamaCare, Is Bending The Cost Curve

Obama’s central planners are latching on to what they think is a rare  ObamaCare “win.” Harvard professor and ObamaCare guru, David Cutler (The health-care law’s success story: Slowing down medical costs) proclaims that ObamaCare has “bent the health care cost curve down” as a consequence of  measures already in effect, such as “value based reimbursements” and “Accountable Care Organizations.”  ObamaCare has thus attained one of its main goals before it even begins. Quite an accomplishment, I must say, if true.

Note that Cutler rules out that the downward bending cost curve is a result of the 2008-9 world recession and the spindly recovery thereafter. As he writes:

“Even as coverage efforts are sputtering, success on the cost front is becoming more noticeable. Since 2010, the average rate of health-care cost increases has been less than half the average in the prior 40 years. The first wave of the cost slowdown emerged just after the recession and was attributed to the economic hangover. [Wrong. The slowdown began during the recession]. Three years later, the economy is growing, and costs [No. He means the growth rate of costs] show no sign of rising. Something deeper is at work.”
Sounds too good to be true. With some minor jiggling, Obama’s central planners have somehow slowed the rise in health care costs for the first time in forty years. Per Cutler: “The Affordable Care Act is a key to the underlying change.”

Cutler fails to mention the world-wide phenomenon of slowing healthcare costs caused by the world recession and the weak recovery in its aftermath. The U.S. medical cost slowdown has nothing to do with the ObamaCare tweaks that Cutler praises. Cutler would have us believe that the somnambulant world economy explains the deceleration of medical costs in all countries except the United States, where ObamaCare must be credited. Try selling that one on the streets.

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