I'm not backing off on the contention that I made in a previous post that the decline in health care spending that resulted in the decline in the first quarter GDP was the result of people not being able to afford to see a doctor after they pay their health insurance premiums. Not only are premiums higher in ACA mandated plans but the deductibles have sky rocketed. In some family plans the insured must shell out as much as $12,000 before they see the benefits of having insurance. For practical purposes they are being forced to buy outrageously priced catastrophic health plans.
The popular interpretation of the data is the decline in health care spending is the result of increased efficiencies in heath care delivery. Looking at line 17 in the GDP report reveals a 0.16 decline in health care spending. In the previous quarter health care spending had increased 0.62. This accounts in large part for the massive gap between the initial GDP estimate of a 0.1% decline and the actual 2.9% decline. It's a swing of 0.78%!
The White House and the media have hailed this as a stunning success. Obamacare has finally bent the health care cost curve. It has facilitated massive efficiencies in the health care market. Au contraire! The patient/consumer is staying home. Examine the BLS data. Employment in the health care sector increased from 14,609,000 in January to 14,650,000 in March which begs the question; how did the industry manage to reduce consumer costs by 0.78% while increasing employment by almost 1%? In every other industry lay offs accompany cost efficiencies but as if by magic in the health care sector they boost employment. Can you say voodoo economics?