I’m all for efficiency and cutting waste and fraud, but it does reduce aggregate demand, begging a tax cut or spending increase elsewhere to sustain output and employment.
By Dan Mangan
June 18 (CNBC) — Already sluggish health-care inflation is expected to slow down even more in 2014 as consumers, employers and the federal government continue looking to cut medical costs, a new report said Tuesday.
And the rate of health-care inflationas distinct from total medical spendingcould drop further in future years as Obamacare rolls out and employers and consumers pay greater attention to costs, suggests the report by the professional services firm PwC.
In 2014, the health-care inflation rate is projected to slow to 6.5 percent, according to the new Medical Cost Trend: Behind the Numbers report by PwC’s Health Research Institute.
That’s 1 percent less than the 7.5 percent inflation rate for 2013 that HRI projected last year.
After accounting for changes in health insurance benefit designs that drive down cost, the net growth rate of inflation next year is projected to be just 4.5 percent, according to HRI The report based those projections on analysis of the large-employer market that covers around 150 million Americans.