Why Health Cost Growth Increases after Estimators Say it’s Slowing: Observer Effects and Feedback Loops

"Health cost growth has slowed down, we think. So let's increase health costs." This is the federal government’s apparent response to some recent sanguine estimates about the future of health cost growth. We might call this response a policy version of the “observer effect,” where the mere observation of reality changes that reality. In this case, the observation that health care costs may be increasing more slowly than expected creates a political reality in which fewer efforts are exerted t...