The slowing growth in the cost of healthcare is as big a story as the fracking revolution, a top Obama economic adviser said Thursday, claiming that the trend is attributable partly to Obamacare.
Speaking at an event hosted in Washington by the Atlantic Magazine Thursday, White House Council of Economic Advisers Chairman Jason Furman called the slowed growth rate of healthcare costs “one of the most undertold stories.”
“I often contrast it with — I don’t think there’s a person in this room that the story on fracking, unconventional oil and gas, and the transformation that that’s bringing to our economy and the global economy — I think everyone in this room knows that story,” Furman said.
Healthcare prices have grown at slow rates in recent years, reducing government spending on programs such as Medicare and the Affordable Care Act subsidies.
The Congressional Budget Office estimated in March that the federal government will end up spending nearly $700 billion less on health care than it projected in 2010 because of the slowdown.
Many independent analysts have attributed the lower rate of spending increases on the poor economy, and the claim that Obamacare has generated the slowdown has been the subject of debate among healthcare and budget experts.
Furman acknowledged that economic weakness, as well as a paucity of expensive new drugs, had driven down healthcare costs increases. But he argued that the changes to the healthcare system made by Obamacare also are behind the development.
As the labor market and economy picked up in 2014, Furman said, the “health cost slowdown not only didn’t reverse, it deepened and extended itself.”
Citing changes to hospital and provider payments and Medicare overhauls included in the 2010 healthcare law, Furman said, “I think we’re just starting to see the benefits of” Obamacare for the cost of healthcare to the government, individuals and employers.
“We have to realize that it’s the president’s policies driving a lot” of the improvement, added Shaun Donovan, director of the Office of Management and Budget. Donovan appeared onstage with Furman at the event.
Donovan, who is responsible for planning the budget, acknowledged that some of the Obamacare changes to the healthcare system might not work as well as expected. But he said “if the things that we’re piloting and experimenting with that have come out of the Affordable Care Act work, the potential implications for the budget deficit and for American well-being and health going forward are enormous.”
