Saturday, January 05, 2013

Number of the day: $6.34 billion

Inspired by this PBT story just out: Hospitals face funding cuts March 1. The total amount of Medicare transfer payments into the Pittsburgh MSA in 2011 amounted to $6.34 billion.  Up from $93 million (nominal dollars) in 1970.   Medicare is just part of medical related transfer payments into the Pittsburgh region's economy.  For 2011, all medical related transfer payments, Medicare, Medicaid, other government programs, amounted to over $10 billion.  Those are annual $ flows, not cumulative over some number of years.

If you want to see how this has changed over time, you may not believe it, but this chart is showing inflation adjusted $ values. I've put in for contrast the comparable data for retirement related transfer payments, the bulk, but not all, of which is Social Security. Also, if you really start to ponder this graph, you have to know a couple big factoids. The elderly population (age 65 and over) for the Pittsburgh region peaked in the mid 1990s, around 1995/6 and then decreased for much of the next 15 years. Only in recent years has that trend stabilized and likely begun to increase. So the growth observed over the last two decades is not because that population has been growing here, but it will be into the foreseeable future again.


Anonymous BrianTH said...

Meanwhile, though, nationwide medical expenditure growth has slowed down considerably over the last few years. There is some debate about how much of that depends on still being in the shadow of the Great Recession, and in turn even if that is true, how much of any such recessionary effect might be replaced by the cost-control measures in Obamacare:

And of course it is possible (albeit not necessarily very likely) that medical transfer programs in particular will see cuts even if medical expenditures in general return to prior trends.

So maybe on a per qualified recipient basis, going forward medical transfers trends might start looking more like retirement transfers trend. Or maybe not.

I will say that those predicting an actual bubble bursting in terms of medical expenditures are likely overstating the reasonable range of outcomes--a mere slowdown such that medical expenditures aren't growing much faster than the economy in general would count as a big victory for cost control (around GDP+1% or so is a popular target).

Tuesday, January 08, 2013 12:56:00 PM  

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