Christopher J. Truffer Talks about the Impact of the Recession on Health Spending

New Hot Paper Commentary, July 2011

Christopher J. Truffer

Article: Health Spending Projections Through 2019: The Recession's Impact Continues


Authors: Truffer, CJ;Keehan, S;Smith, S;Cylus, J;Sisko, A;Poisal, JA;Lizonitz, J;Clemens, MK
Journal: HEALTH AFFAIR, Volume: 29, Issue: 3, Page: 522-529, Year: MAR-APR 2010
* Ctr Medicare Serv, Off Actuary, Baltimore, MD USA.
* Ctr Medicare Serv, Off Actuary, Baltimore, MD USA.
* Ctr Medicaid Serv, Off Actuary, Baltimore, MD USA.

Christopher J. Truffer talks with ScienceWatch.com and answers a few questions about this month's New Hot Paper in the field of Social Sciences, general.


SW: Why do you think your paper is highly cited?

I think our paper is highly cited because it provides a comprehensive set of projections of health expenditures in the US (and it represents the government's official set of estimates). Each year the Office of the Actuary produces these estimates including breakdowns by payer and by service.

This particular paper provides insight into the ways that the recent economic recession is impacting health care spending in the United States, including slower growth in both out-of-pocket spending and spending by private health insurers, and faster growth in spending by Medicaid. The recession is expected to have led to historically low rates of growth in overall health care spending in 2009 and 2010, but at the same time, health care's share of the economy is expected to have grown substantially.

Our paper also provides a "pre-reform" view of the next 10 years of health care spending, as it was published before the Affordable Care Act was passed later in 2010. Our subsequent paper (Sisko, et al., "National Health Spending Projections: The Estimated Impact of Reform Through 2019," Health Affairs, October 2010) and all of our future work incorporates the many impacts that the Affordable Care Act are anticipated to have on health care spending, especially with the start of the Health Insurance Exchanges, expansions of Medicaid eligibility, and other changes to Medicare, Medicaid, and the health care system overall.

Finally, as you may know, this paper, as well as similar past papers, is regularly among the most-read articles in Health Affairs as the projections and accompanying analysis in the paper provide both insight into the ways different events and trends are affecting health care spending and a good background for those studying and learning about the US health care system.

SW: Does it describe a new discovery, methodology, or synthesis of knowledge?

"Because our health care system is so strongly interconnected, it is critical to have a broad perspective on it as we consider changes to any part of it. While our research does not advocate for any particular policy or make any normative judgment, it is useful in providing a better understanding of the health care system and the trends that influence future expenditures to those people who are developing or reviewing policy."

Not particularly. Each year we develop a new set of projections that incorporates the latest economic conditions, historical trends, and legislative and regulatory changes that affect health care expenditures, but we would not consider this a new discovery.

SW: Would you summarize the significance of your paper in layman's terms?

First, the economic recession led to relatively slow growth in health care spending in the United States in 2009 and 2010, as a result of slow spending growth by private health insurance and from households out-of-pocket. Second, increasing unemployment and slowing income growth are expected to have led to decreases in the number of people with private health insurance. At the same time, these trends led to faster growth in enrollment in and spending for Medicaid. Third, excluding any impacts from health care reform, health care spending was expected to grow faster after 2010 and health's share of the economy was anticipated to increase to nearly 20% of GDP by 2019.

SW: How did you become involved in this research, and how would you describe the particular challenges, setbacks, and successes that you've encountered along the way?

The Office of the Actuary has been developing historical estimates and projections of health care expenditures for the last several decades. I started working on the National Health Expenditure projections in 2003. Developing these projections is always challenging, because the health care system in the United States is constantly changing and is affected by changes in economic conditions, in health care treatment patterns, and in legislation and regulation.

In the last several years, we have seen the start of the Medicare prescription drug benefit, the reauthorization of the CHIP program, and the passage of health care reform, which will have substantial implications for the future of health care for many years. In addition, the last recession had significant impacts on health care spending and enrollment in private plans and public programs. We have also seen health care steadily grow as a share of the economy and government programs continuing to play a larger role in the financing of health care. These types of events and trends are important to understand and fully incorporate into our projections, and these are often of great interest to the public, as well.

SW: Where do you see your research leading in the future?

In the near future, we plan to issue a new paper that includes the impacts of health care reform on health care expenditures by payer and by service. This is especially important because there are numerous changes to Medicare and Medicaid in the Affordable Care Act and because the spending patterns of people gaining coverage through the Health Insurance Exchanges and Medicaid expansions may differ from those already covered through private health insurance or Medicaid today. Also, I expect that there will be much to learn about the way the health care system operates as the economy recovers following the end of the recession.

SW: Do you foresee any social or political implications for your research?

One of the primary goals of our research is to provide the public, researchers, and policymakers with a thorough analysis of the trends affecting health care spending and objective projections on the future of health care spending and enrollment over the next 10 years. We believe that this is helpful, given the prominent role of health care in the nation's economy and the continuing attention it has received from policymakers.

Because our health care system is so strongly interconnected, it is critical to have a broad perspective on it as we consider changes to any part of it. While our research does not advocate for any particular policy or make any normative judgment, it is useful in providing a better understanding of the health care system and the trends that influence future expenditures to those people who are developing or reviewing policy.End

Christopher J. Truffer, F.S.A.
Actuary
Office of the Actuary
Centers for Medicare & Medicaid Services
Baltimore, MD, USA

KEYWORDS: HEALTH SPENDING PROJECTIONS, RECESSION, IMPACT, UNEMPLOYMENT, DEMOGRAPHICS, MEDICARE, GROSS DOMESTIC PRODUCT, PUBLIC SPENDING, PRIVATE SPENDING.

 
 

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