ER visits, drug price hikes drive health spending up
- Healthcare spending per person is growing at a faster rate than previous years, a new analysis from Health Care Cost Institute (HCCI) found. Spending increased 4.6% in 2016 compared to 4.1% growth in 2015, following a two-year period of sub-3% growth from 2012 to 2014.
- Utilization of healthcare services went unchanged — or actually declined in some services such as in inpatient settings — over the same time period.
- Prescription drugs showed the highest cumulative spending growth of any category, driven by three therapeutic areas, including anti-inflammatory and hormonal agents. Large spending growth increases in outpatient ER visits (34%) and surgeries (12%) also contributed to the large increases.
The report, which focuses on employer-sponsored coverage, echoes previous studies showcasing how price hikes affect healthcare spending. Spoiler alert: spending rises.
For example, a recent JAMA report found healthcare spending increased by $933.5 billion between 1996 and 2013, with healthcare price hikes helping to fuel more than 50% of the spending increase.
The report highlights the furor intensifying in recent years over prescription drugs. It found spending on prescription drugs increased 27.2% between 2012 and 2016, and drug prices increases 25% in the same time period.
The data also highlight care utilization trends facing the hospital industry. Inpatient use, with the exception of mental health and newborn services, has declined. Despite inpatient surgery utilization declining 16% between 2012 and 2016, prices increased 30%.
Outpatient utilization has increased in some services, including observation (2%), ER visits (2%) and ancillary (3%). Though ER visits increased by only 2%, the price of an outpatient ER visit increased by 31% to $1,917. Men and women between the ages of 45 and 64 tend to visit the ER more than other age groups.
In line with a common notion that millennials and younger generations are less tied to a relationship with a primary care physician, HCCI found primary care office visits decreased 6% during the study's time period.
"The decline in spending on PCP office visits over the study period was driven by the 18% decline in use of these visits," the report stated. "In contrast, the increased utilization of specialist visits contributed to a 31% spending increase for those visits."
The analysis suggests that specialist office visits may be increasing because of insurance plan design, or they may be substituting for primary care, but the authors did not come to a definitive conclusion.
- Healthcare Dive Price increases, population growth drive majority of rising healthcare spending
- Health Care Cost Institute 2016 Health Care Cost and Utilization Report
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