Good news from the healthcare ledger

The endlessly quotable Yogi Berra once said, “It is difficult to make predictions, especially about the future.” An interesting study on healthcare spending may have proven this quip true once again, which could mean good news for the sustainability of the U.S. healthcare system.

The research, published in the May issue of Health Affairs, argues that current projections from the Centers for Medicare & Medicaid Services and the Congressional Budget Office are overestimating healthcare spending over the next decade to the tune of $770 billion.

That’s no small miscalculation. If true, it could be a boon to the overall economy, according to authors David M. Cutler, PhD, and Nikhil R. Sahni, both from the department of economics at Harvard University.

Annual healthcare spending growth, which was as high as 5.7 percent in the early 2000s, has fallen considerably in the last few years. Cutler and Sahni wrote that while previous estimates attributed the slowdown largely to the recession, meaning spending would roar back once the economy fully recovers, their analysis showed more permanent, structural changes in healthcare could have been the cause. Reduced spending on imaging and pharmaceuticals, increased provider efficiency and more prevalent cost sharing all could have lasting power to slow spending growth.

Another financial story from this week, although on a much smaller scale, came from the Journal of the American College of Radiology, in which an article detailed how one hospital found the costs of free CT lung cancer screening could be offset by revenues from treatment. Lahey Hospital in Burlington, Mass., instituted a free CT screening program. Rather than become a fiscal drag, estimates are that by the third year of the program, revenue derived from follow-up studies of discovered nodules, which are billed to insurance, will offset the costs of free initial screenings.

What stories, about financial matters or otherwise, caught your eye this week?

Evan Godt
Sr. Staff Writer