Healthcare spending grew 9.9 percent year-over-year in the first quarter of 2014, according to data released yesterday by the Bureau of Economic Analysis.
Overall, the real gross domestic product grew just 0.1 percent in the first quarter, down from a 2.6 percent growth rate in the fourth quarter of 2013. The slowdown reflects downturns in exports, business investments, inventory investments and consumer spending, according to the Bureau of Economic Analysis. Healthcare price growth also remained slow at 0.5 percent annually.
A White House blog post attributes 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. Furthermore, any upward pressure on healthcare spending growth from expanding insurance coverage will cease once coverage stabilizes at its new, higher level, so it does not affect the longer-term outlook for spending growth."
The surge in healthcare spending has also been attributed in part to the recovering economy. Healthcare spending growth began to pick up last year (before the PPACA coverage expansion provisions took effect), growing 5.6 percent year-over-year in the fourth quarter. At the time, that was the highest growth rate recorded since 2004.
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