A significant and consistent slowdown in the cost of healthcare is shrinking the budget deficit.
A report issued last week by the Congressional Budget Office (CBO) said that hundreds of billions of dollars have been erased from projected spending on Medicaid and Medicare.
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Spending on those programs will now be about 15% less or $200 billion than it projected three years ago.
Healthcare experts cannot quite pinpoint the reason for the projected savings. Some say changes in the way healthcare is delivered, not just the weak economy, is responsible.
There is sharp disagreement on what spending on the programs might look like in years to come.
Some insurers have offered providers incentives to reduce complications and rehospitalizations and doctors and nurses have focused on eliminating wasteful treatments.
Even if spending growth continues to slow, healthcare remains a major budgetary concern because of the size of the aging Boomer population.
The fact that the slowdown began before the recession did could be one sign the slowdown might be long lasting.
The slowdown is noticeable
in both government and general health spending. It grew at the slowest annual pace in recorded history between 2009 and 2011.
Overall Medicare outlays rose only 3% in 2012, the lowest since 2000.