Healthcare spending decreased by 1.4 percent year-over-year during the first quarter of this year, according to data released by the Bureau of Economic Analysis.
Healthcare spending decreased gross domestic product growth by 0.16 percent. Overall, the GDP shrank by 2.9 percent year-over-year, according to the data. These numbers contrast significantly with a preliminary report the BEA released earlier this year, which indicated healthcare spending skyrocketed by 9.9 percent year-over-year.
According to the BEA, the latest estimate is based on more complete source data. The increase in personal consumption expenditures in the first quarter ended up being smaller than previously estimated, while the decline in exports was larger. The GDP decrease was also driven by a decrease in nonresidential fixed investment and in state and local government spending, in addition to a decline in private inventory investment.
After the release of the initial BEA estimates earlier this year, the White House attributed the healthcare spending spike to the Patient Protection and Affordable Care Act: "The sharp increase in estimated utilization appears to have been driven by greater use of healthcare services by people who gained insurance coverage during the first quarter because of the [PPACA]. Ensuring access to care is a key goal of the [PPACA's] coverage expansion, so this increase in utilization is neither a surprise, nor a cause for concern."
A White House blog post about the latest BEA data maintains that healthcare spending growth will accelerate in the near future as millions gain coverage under the PPACA, despite the decline in the first quarter. "Because health care spending can be volatile on a quarter-to-quarter basis (2013:Q4, for example, was estimated to have seen growth somewhat above the recent trend), it can be useful to look at a longer time period," Jason Furman, chairman of the council of economic advisors, wrote in a blog post.
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