Feb. 12, 2019
Dive
Brief:
- Higher
prices, outpatient services and mental health and substance use admissions
drove average annual healthcare spending for people with
employer-sponsored health insurance to a new high of more than $5,600 in
2017, the Health Care Cost Institute reported in a new study.
- HCCI
said per-person healthcare spending increased by 4.2% in 2017 to $5,641.
- Outpatient services saw
the most significant spending growth (5.1%). Mental health and substance
use admissions increased by 18% between 2013 and 2017.
Dive
Insight:
The report echos
other recent findings of higher healthcare costs despite lower use
overall.
Healthcare
spending growth exceeded 4% for the second straight year, according to HCCI.
That’s higher than the per-capita GDP growth.
HCCI analyzed
professional services, inpatient spending, outpatient spending and prescription
drugs. Average spending per patient in 2017 was: professional services ($1,898
or 33.6% of costs), inpatient ($1,097 or 19.5%), outpatient ($1,580 or 28%) and
prescription drugs ($1,065 or 18.9%).
Premium rate
increases are one major factor in the high-spending low-utilization trend. The
Commonwealth Fund, which released a similar spending report
in December, found family premiums increased in 44 states, reaching $20,000 or
higher in seven states and the District of Columbia. Workers with
employer-sponsored plans are watching more and more of their income go toward
premium contributions.
Health insurance
costs are increasing at a faster rate than wage growth, the Commonwealth Fund
found. Yet insurance quality isn't improving.
A Health Affairs study
published last week found hospital prices for inpatient care have skyrocketed
substantially faster than physician prices, and similarly so for outpatient
settings. Researchers suggested policymakers focus on antitrust enforcement, as
market consolidation continues to reduce competition.
American
Hospital Association President Tom Nickels argued that hospitals have expenses
physicians don't, including administrative expenses, drugs and medical devices.
HCCI found
spending on administered drugs was one of the fastest growing professional
services categories, rising by 45%. Psychiatry spending grew by 25% between
2013 and 2017, while utilization of those services increased by 18%. Spending,
utilization and prices for inpatient care for mental health and substance use
all increased.
Inpatient
spending grew by 10% between 2013 and 2017 despite a 5% drop in utilization.
Instead, rising prices for medical and surgical admissions drove the spending
growth.
Outpatient
visits and procedures increased by more than 5%, driven by outpatient surgeries
and emergency room visits. Outpatient surgeries decreased by 4%, but prices
increased by 14% over the five years.
Meanwhile, ER
visit utilization increased by 10% and prices by 24%. Prescription drug
utilization grew by 3% between 2016 and 2017 after three years of little
change.
Not
surprisingly, HCCI found that younger people aren't using much healthcare. More
than 40% of 19- to 25-year-olds weren't involved in any claim or prescription
drug. That's compared to just 16% of people between 55 and 64.
The per-person
spending increase in 2017 was slightly below the level in 2016
(4.6%). HCCI's 2012-2016 analysis
blamed price increases as the main driver for the higher costs. Following two
years of sub-3% increases between 2012 and 2014, healthcare costs increased by
more than 4% each year between 2015 and 2017.
The report comes
shortly after United Healthcare, the largest private payer, said it would no longer provide claims
data to the nonprofit. HCCI will still receive claims data from Aetna, Humana
and Kaiser Permanente.
"HCCI and
its board are seeking new partners to enable continued analysis of the
ever-growing U.S. healthcare sector. Much work remains to be
done," Bob Town, chair of the HCCI board and professor at the
University of Texas-Austin, said at the time.
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