- The total cost of inpatient services for privately insured consumers exceeded $200 billion in 2018, UnitedHealth Group, parent company of the nation's largest commercial insurer, said in a report released this week.
- Placing blame primarily on hospitals, UnitedHealth said inpatient prices rose 4.5% annually from 2013 through 2017 — even though insured consumers' use of inpatient care dropped 5%. Physician prices for inpatient services rose 2.5% annually during the five-year period — or an average of 2 percentage points less than hospital prices.
- Hospital prices rose even faster annually than physician prices during the five-year period for some inpatient services such as hypertension (6.5% to 1%), vaginal birth (6% to 2%), cesarean section (5.5% to 2%), coronary bypass (6% to 1.5%) and appendectomy (7.5% to 0%), UnitedHealth Group said.
The ever-increasing cost of healthcare products and services has been a topic of heated debate during the 2020 election cycle, with some Democratic candidates for president blaming the problem, in part, on health insurers.
Meanwhile, CMS released a proposed rule last month that would require hospitals to disclose payer-specific negotiated rates for about 300 non-urgent services. Both hospitals and payers generally oppose the proposal.
It's not surprising, then, that UnitedHealth has released several reports this year on healthcare prices in which it assigns blame to providers, including the new report on inpatient spending.
For the new study, the insurer analyzed inpatient claims for employer-based coverage from 2013 through 2017, adjusting for changes in intensity to compare price increases. In its calculation of inpatient spending in 2018, it analyzed its claims data and national expenditure data from CMS.
Based on its analysis, UnitedHealth projects the annual cost of inpatient services for privately insured consumers will exceed $350 billion in 2029. It also argues inpatient spending would be reduced by $50 billion in 2029 and $250 billion between 2020 and 2029 if hospital price increases were held to 2 percentage points per year.
Hospital prices for inpatient services incorporate a variety of costs, such as labor, equipment, information technology, medical supplies, and building maintenance and security.
In a separate study of facilities in Texas, UnitedHealth Group calculated that freestanding emergency department (FSED) visits cost an average of $3,217 — 22 times more than the cost of treatment at a physician office ($146) and 19 times ($167) more than at an urgent care center. Noting that most of the visits to FSEDs are for common nonemergency conditions, such as sore throats and fevers, UnitedHealth Group said shifting those visits from FSEDs to physician’s offices and urgent care centers would save more than $3,000 per visit.
UnitedHealth Group also released a study in which it analyzed claims for 12.5 million diagnostic tests in 2017, finding significant cost variations for some common diagnostic tests such as echocardiograms, mammograms and ultrasounds. For example, the company found the price paid for an echocardiogram ranged from $210 to $1,830.
Meanwhile, Kaufman Hall released a flash report showing hospital operating margins were down 1.88% in June. Kaufman Hall suggested hospitals are not responding quickly enough to the continued movement of services from inpatient to outpatient settings.