Business Wire November
19, 2019
The
Partnership to Fight Chronic Disease (PFCD) has just released, “What Accounts for the Growth in Private Health Insurance
Spending?” an economic analysis by Kenneth E. Thorpe, Ph.D., PFCD
Chairman and Robert W. Woodruff Professor and Chair of Health Policy and
Management at Emory University.
Between
2016 and 2018, private insurance spending increased by $101 billion overall. Of
that total, hospital spending grew by nearly $43 billion. At the same time,
there was a $21.3 billion increase in insurance plan administration costs and
profits and a $20.6 billion increase in spending on physician and clinical
services. Prescription drugs accounted for $3.6 billion of the increase.
“The
highest of these insurance spending costs glaringly point at utilization, and
with an increasing population of Americans living with one or more chronic
conditions, the demand for health services will inevitably persist,” states Dr.
Thorpe. “Achieving better overall health is essential to lowering health care
costs, and the most impactful place to start is by elevating how we address
chronic disease on the health care agenda.”
Health
spending growth is determined by how much a health insurer is spending on
medical care services (price and utilization) and the health plan’s
administrative spending (operational costs and profits). This analysis
determined the leading drivers of increased spending in the private market
using the 2016-2018 National Health Expenditures (NHE) data reported by the
Centers for Medicare & Medicaid Services (CMS).i
Additional costs assessed include nursing care facilities ($3B), home health
services ($.79B) and other health, residential and personal care ($9.3B).
Between
2016 and 2030, chronic disease is projected to cost the U.S. $42 trillion.ii With
six in ten U.S. adults having at least one chronic condition, and more than
four in ten living with two or more,iii efforts to find health savings
must consider how better patient care and chronic disease management can reduce
the drivers of spending growth.
A full
copy of the analysis, an infographic and video brief can be found here.
i Accessed
from: Centers for Medicare and Medicaid Services at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/index.html?redirect=/NationalHealthExpendData/02_NationalHealthAccountsHistorical.asp
ii What
is the Impact of Chronic Disease on America? Partnership to Fight Chronic
Disease. Available at https://www.fightchronicdisease.org/sites/default/files/pfcd_blocks/PFCD_US.FactSheet_FINAL1%20%282%29.pdf
iii Buttorff
C, Ruder T, Bauman M. Multiple Chronic Conditions in the United States. Santa
Monica, CA: RAND Corporation, 2017. Available at https://www.rand.org/pubs/tools/TL221.html.
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