Health Care

US Consumer Healthcare Spending Up Says Report

US Consumer Healthcare Spending Up Says Report”

Almost all of the spending growth can be attributed to price increases, not to increases in utilization, said Niall Brennan, president of Health Care Cost Institute. In 2015, spending grew 4.1% over the prior year.

The report, built on claims data from 39 million people who receive insurance through their employers, found especially sharp increases in the prices of emergency room visits, surgeries and drugs administered in doctors' offices.

Prescription drugs showed the highest cumulative spending growth of any category, driven by three therapeutic areas, including anti-inflammatory and hormonal agents.

The institute's annual Health Care Cost and Utilization Report, released Tuesday, examines health care use and spending from 2012 to 2016 among people up to age 65 with employer-sponsored health insurance. Spending on drugs did moderate a bit from the 10.4% growth seen in 2015.

While healthcare spending depends on price and service use, substantial hikes in healthcare spending between 2012 and 2016 were mainly due to price increases, according to a recent Health Care Cost Institute report.

Consumer out-of-pocket spending per person increased, but grew more slowly than total spending. However, spending on office visits to specialists rose 31 percent, and spending on preventive care visits rose 23 percent. "More recent data provides key insights into the spending and costs of prescription medicines", PhRMA said in an email to HealthLeaders Media. But as deductibles increase, Americans have a harder time paying for healthcare and start to put off both unnecessary and necessary care.

Utilization, however, trended down between 2012 and 2016.

The price of inpatient and outpatient surgeries also increased.

The fact that the price of healthcare can rise while demand drops is a peculiarity of the industry, Brennan said. The study also found large price increases for administered drugs (up 42% to $581 on average) and outpatient ER visits (up 31% to $1,917 on average) over the five-year period.

The average price for surgical admissions increased by 30 percent between that five-year period, but there was a 16 percent drop in utilization. Prices did decline in some cases, but by small amounts.

The major factor driving this increase in spending is increasing prices, according to the report. It's hard to pin down just what's driving the increase in prices, which can vary by thousands of dollars between hospitals within the same neighborhood for the same service. The claims data, representing about a quarter of all people covered by employer-based insurance, came from insurance companies including Aetna, Humana, Kaiser Permanente and UnitedHealthcare.

Since health care premiums are paid by workers and their employers, the increased costs hit people indirectly even when they are not paying out-of-pocket. "These discounts rebate more than one-third of the list price back to payers and others in the supply chain".



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