Health spending, insurance profits down

Health spending has declined, according to a new study, and it appears to be affecting insurance company bottom lines.

National Journal: Health Spending Grew Just 4.4 Percent In 2011, Study Says
U.S. health care spending grew at one of the slowest rates in 50 years last year, according to one analysis published on Thursday. Spending grew 4.4 percent from 2010 to 2011, for a total of $2.71 trillion, the nonprofit Altarum Institute reported. "This represents an increase over the government's official estimate of spending growth in 2010 (3.9 percent) that was released last month," the report reads. This is the third slowest rate of growth since national health expenditures have been tracked, the group said (Fox, 2/9).

Reuters: Analysis: U.S. Health Care Stocks Face Obstacles After 2011 Run
After beating the market in 2011, health care stocks may struggle for a repeat performance this year as cash-strapped Americans keep putting off use of medical services and investors seek out faster growth stocks as the economy improves. So far this year, health care has underperformed the broader market: The Standard and Poor's Healthcare index, GSPA is up about 4 percent compared to a 7 percent increase for the S&P 500 index (Berkrot and Krauskopf, 2/9).

Meanwhile, one insurer is moving to a new payment model.

Bloomberg: UnitedHealth Overhauls Doctor Payments By Tying Them To Quality Of Care
UnitedHealth Group Inc. (UNH), the largest U.S. health insurer by sales, will pay doctors based on the quality of their care in a cost-cutting effort that also benefits the company's consulting business (Frier and Armstrong, 2/9).