|Year-Over-Year Percent Change in Personal Consumption of Health Care, 1980-2012|
January 31, 2013
One especially noteworthy item in the recent Bureau of Economic Analysis' report on the Gross Domestic Product is the continuing slow pace in the growth of spending on health care services, which accounts for almost three quarters of all health care spending. Nominal spending grew at a just a 2.3 percent annual rate in the quarter. Over the last year, nominal spending is up by just 3.7 percent, far less than the rate of growth of GDP, and well below the projections from the Congressional Budget Office (CBO). It seems increasingly likely that we are on a slower health care cost trajectory. The deficit picture will look very different when CBO incorporates this slower growth trend into its projections.
For more, check out the latest GDP Byte.