Explaining the Growth in US Health Care Spending Using State-Level Variation in Income, Insurance, and Provider...

The slowed growth in national health care spending over the past decade has led analysts to question the extent to which this recent slowdown can be explained by predictable factors such as the Great Recession or must be driven by some unpredictable structural change in the health care sector. To help address this question, we first estimate a regression model for state personal health care spending for 1991-2009, with an emphasis on the explanatory power of income, insurance, and provider market characteristics. We then use the results from this simple predictive model to produce state-level projections of health care spending for 2010-2013 to subsequently compare those average projected state values with actual national spending for 2010-2013, finding that at least 70% of the recent slowdown in health care spending can likely be explained by long-standing patterns. We also use the results from this predictive model to both examine the Great Recession's likely reduction in health care spending and project the Affordable Care Act's insurance expansion's likely increase in health care spending.