WASHINGTON - Call it the $2.8 trillion enigma. That's what Americans spent on health care in 2012. The good news is that health spending slowed unexpectedly for the fourth consecutive year.
The enigma is that no one really knows why. Despite many theories, there's no expert consensus.
Although I've written about this before, I return to it because runaway health spending is a huge national problem. It has squeezed take-home pay (employers channel more compensation to health insurance and less to salary) and is crowding out other programs - schools, defense, regulation, police - at the federal and state levels.
If the present slowdown is just temporary, then all these problems remain. But if there's a permanent shift, then the nation's economic and budget outlook has significantly improved.
Let's start with the facts, as recently reported by the Centers for Medicare and Medicaid Services (CMS) and printed in the journal Health Affairs.
In 2012, U.S. health spending grew 3.7 percent, virtually identical with the increases in 2009 through 2011 and much slower than the 9.7 percent of 2002, the latest high point. The increase was so small that health spending as a share of the economy (gross domestic product) actually shrank, from 17.3 percent of GDP in 2011 to 17.2 percent. This almost never happens. Health care as a share of GDP has been climbing steadily since 1960, when it was about 5 percent.
Note an apparent paradox. Tame overall spending contrasts with reports of hefty premium increases on the insurance exchanges established by the Affordable Care Act (Obamacare). How can both can be true? Easy. By law, the insurance plans offered on exchanges often provide more coverage than plans they're replacing - and hence cost more.
Now, the competing theories.