Cardiff Garcia on the AEA meetings, and the health care cost slowdown

Here is one bit of many:

The embedded papers by Louise Sheiner of Brookings, Chapin White of the Rand Corporation, and Thomas Getzen of Temple University are recommended. To be simplistic, there was agreement that much of the slowdown was likely the result of the recession and sluggish recovery, as slow economic growth translated into less health spending and also slower wage growth for health care workers. But not all of it.

Sheiner finds that outside of spending on prescription drugs — which has been flat since 2008 because of the patent cliff — there actually hasn’t been any unexplained slowdown in health spending relative to the fifteen years before the recession. In this context, “unexplained” means a change in health spending that can’t be attributed to the business cycle. She also adds the intriguing observation that in a downturn, more health workers join the labour force, often because their spouses have lost their own jobs — but wages for health workers fall. The shortage of registered nurses mostly evaporated after the recession of 2008, she said.

White looked more closely at the Medicare slowdown and believes that the Affordable Care Act’s price cuts did have an impact, as did a recent crackdown on fraud by the Centers for Medicare & Medicaid Services.

I hope the rest is not “too gated” for you, hat tip goes to Claudia Sahm.  And Philip Greenspun reports on the meetings.