With the US economy dragging itself to its feet, the housing and stock markets crawling back, and the Republican presidential candidates (and their nationally syndicated Falstaff) doing everything imaginable to alienate most American women, President Obama has been having quite a run of good luck. But there is one piece of good news clearly not welcome around the White House: new data showing that health care costs are stabilizing.
I know, I know – this is health care, costs are always out of control, and the sky is always falling. What could I possibly be talking about?
I’m talking about the actual numbers. The accompanying graphs reveal that health spending has actually been stabilizing for several years, and the system we all love to hate is finally re-entering the economy’s normal orbit after three decades of skyrocketing growth.
This of course is hardly a cause for celebration around the Obama Administration, for obvious political reasons. Why else would economists from the same department tasked with implementing health reform choose to tell us that this long-awaited good news is actually – well – bad news.
Huh? In both graphs below, newly released data through 2010 show that health spending over the past several years has been normalizing to the rate of overall inflation rather than outpacing it – or grossly outpacing it – as has been the case, nearly without interruption, since the 1970s.



Hospital leaders are busy trying to cope with the changes brought on by the Patient Protection and Affordable Care Act and the realization that the federal budget deficit translates into less money for all healthcare providers in the future. The seemingly inevitable transition from fee-for-service to global payments creates anxiety about how quickly the financial incentives will shift.
The going rate for a compromised medical record seems to be $1000 (well, at least that’s the asking price) as seen in papers filed in the eleven class action lawsuits against Sutter Health following the theft of a desktop computer last fall. The computer contained unencrypted protected health information on about 4.24 million members. The eleven class action suits are likely to be consolidated for ease of handling by the courts.