Chart of the Day: The Future of Health Care Costs Looks Surprisingly Rosy

You’ve seen various versions of this chart from me before, but perhaps you’d like to see it from a pair of highly-qualified researchers rather than some shorts-clad blogger? Not a problem. A recent paper out of the Schaeffer Center for Health Policy and Economics at USC shows that the annual increase in health care costs has been dropping steadily for more than 30 years. The green arrow shows the trendline.

Obviously this won’t go on forever. But once again, it shows that the recent slowdown in health care costs isn’t just an artifact of the Great Recession. That probably helped, but the downward trend far predates the recession. Bottom line: there will still be spikes and valleys in the future, but there’s every reason to think that the general trend of health care costs over the next few decades will be either zero (i.e., equal to overall inflation) or pretty close to it.