CMS Says Health Spending Growth Has Slowed and Azar Speaks
ByWashington Correspondent, MedPage Today
WASHINGTON — Health and Human Services (HHS) Secretary Alex Azar said “Medicare for All” will never work because physicians won’t participate. And in other news, health spending topped $3.5 trillion last year, but growth is still slower than the previous two years, according to a new report from the Centers for Medicare & Medicaid Services (CMS).
CMS: Health Spending Growth Slowed to 3.9% in 2017
National health spending rose 3.9% in 2017 — a slower growth rate than the previous two years — mainly due to a slowdown in use and intensity of hospital care, physician and clinical services, and prescription drugs, CMS said Thursday.
Spending reached $3.5 trillion, but grew more slowly than in 2016, when it increased by 4.8%, or 2015, when it grew by 5.8%, according to Anne Martin, lead author of the report and an economist in the National Health Statistics Group at CMS’s Office of the Actuary, who spoke on a phone call with reporters. The 2017 health spending growth of 3.9% is lower than the 4.2% increase the gross domestic product (GDP) for 2017; healthcare’s share of the GDP was 17.9%, similar to 2016.
The slowing growth rate compared with the last two years “is a pleasant surprise, in part because as the economy improves you worry that one of the unintended consequences… is that we might see an increase in spending, but that doesn’t appear to be happening,” Gail Wilensky, PhD, who served as CMS administrator under President George H.W. Bush, said in a phone interview. “It is especially promising as we’re continuing a 20-year cycle of having baby boomers age into Medicare,” although a single year of decrease doesn’t necessarily mean a trend, added Wilensky, a senior fellow at Project HOPE, in Bethesda, Maryland.
More Competition Would Be Good for Healthcare, Says Azar
‘Medicare for All’ has a fatal flaw, according to Azar: “It depends on paying providers’ Medicare rates.”
Azar, speaking at an event here sponsored by the American Enterprise Institute, was asked his opinion about allowing non-disabled people ages <65 the ability to “buy into” Medicare in order to give them another option for health insurance. “The challenge of the Medicare buy-in is that it is effectively one of the many iterations of ‘Medicare for All’ — it hinges on the notion of paying all providers what Medicare pays doctors and hospitals,” he said.
“Medicare underpays providers right now compared to the competitive market. If you allow this buy-in, or ‘Medicare for All,’ with access to lower Medicare rates, you will crowd out and cause the complete and utter destruction of the employer-sponsored health insurance system in the United States… There is simply no way private-sector insurance could compete against that, and it would be completely destructive to hospitals and doctors.”
Under such a system, “better hospitals and doctors opt out, and they say, ‘I’m not part of that system; I won’t take it,’ and seniors will suffer because seniors don’t have access,” he added. “It seems [superficially] appealing until you get to the mechanics of why does one want to do it, and it brings the whole system crashing down.”