Healthcare spending in the U.S. and other nations with advanced economies is growing, but that growth is screeching to a halt.
A new report in the Wall Street Journal explains that the global economic recession has helped to slow healthcare spending. This is in line with a recent report by the Organization for Economic Cooperation and Development, or OECD, which showed a slump among its member nations -- the U.S., U.K., France, Germany, Spain, Japan, Canada, etc.
Here's the graph showing the OECD fall-off:
The OECD explains:
While government health spending tended to be maintained at the start of the economic crisis, cuts in spending really began to take effect in 2010. This was particularly the case in the European countries hardest hit by the recession.
Now, the Journal reports that U.S. per-person spending on healthcare grew at an annual average rate of 2.1 percent between 2005 and 2010. That compares with 4.3 percent between 2000 and 2005 and 3.2 percent in the five years before that.
David Wessel writes:
Americans cut back spending on nearly everything but iPhones. They go less frequently to the doctor, put off elective procedures and cut back on prescription drugs. It is the most significant slowdown in health spending since the heyday of managed care in the late 1990s.
The wild card is, of course, the latest reforms to the American healthcare system. The U.S. has long had a problem with overspending (total and per capita) on its healthcare services; the economic question is whether the recent drop is a temporary low or a new normal.