Study points to big drop in health care spending
A slowdown in the growth of U.S. health care costs could mean savings of as much as $770 billion on Medicare spending over the next decade, Harvard economists say. In a paper published in the May issue of Health Affairs, David Cutler, the Otto Eckstein Professor of Applied Economics, and co-author Nikhil Sahni, a senior researcher in Harvard’s Economics Department, point to several factors, including a decline in the development of new drugs and technologies and increased efficiency in the health care system, to explain the recent slowdown. If those trends continue over the next decade, they say, estimates of health care spending produced by the Congressional Budget Office (CBO) and the Office of the Actuary at the Centers for Medicare and Medicaid Services could be off by hundreds of billions. “Historically, as far back as 1960, medical care has increased at about one and a half to 2 percent faster than the...