July 19, 2018
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Working Americans are using less health care, but spending more

DREAMSTIME/TNS | BDN
DREAMSTIME/TNS | BDN
Americans who get health insurance through their jobs are not using more medical care than they were five years ago, but they are spending more because of soaring medical prices, according to a new report.
By Carolyn Y. Johnson, Washington Post
Updated:

Americans who get health insurance through their jobs are not using more medical care than they were five years ago, but they are spending more because of soaring medical prices, according to a new report.

Health spending for the more than 150 million people who receive insurance through their employers was $5,407 per person in 2016. That is a 4.6 percent increase over 2015, even though people’s use of almost every broad category of care dropped or stayed the same over a five-year period, according to a new analysis from the Health Care Cost Institute, a nonprofit funded by the insurance industry.

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.

The number of emergency room visits increased modestly between 2012 and 2016, by 2 percent. Meanwhile, the average price of those visits soared 31 percent, to $1,917. Admissions to the hospital for surgery dropped 16 percent over that period, but the average price increased to $41,702, or a 30 percent jump. The price of physician-administered drugs, such as infusions for chemotherapy, increased by 42 percent.

Utilization of brand name prescription drugs dropped, but overall spending increased due to price increases, according to the data – which does not take into account rebates and coupons. For example, utilization of brand name drugs for skin diseases dropped by 42 percent, but prices increased by 165 percent.

“The health-care cost curve, at least for the employer-sponsored insurance population, seems to be trending in the wrong direction again,” Niall Brennan, president of the Health Care Cost Institute, said. “The cumulative change over a five-year period basically highlights, very starkly, that working Americans are using or consuming the same or less health care, yet the prices they’re paying for that health care are going way up.”

Consumers were somewhat insulated from these price increases, with out-of-pocket spending growing slower than overall spending. People were particularly protected from increases in spending on prescription drugs, according to the study, with the out-of-pocket costs of drugs falling by $27 per person cumulatively over the five years.

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.

The study raises more questions than it answers. Researchers found a striking drop-off in visits to primary care physicians, accompanied by a large jump in visits to specialists. That trend appears to go against a core health restructuring goal for people to seek care in low-cost settings and so reduce the unnecessary use of high-cost services.

Brennan said his team will try to unpack this trend. Are those patients sicker? Are they substituting specialist visits for primary care doctors for some reason? Are doctors classifying themselves as specialists for billing purposes, since reimbursements will be higher?

Another question arises about why utilization has remained flat or decreased in so many areas of care — and whether that is a good thing. High deductible health plans, which put consumers on the hook for more of their health care expenses, have been shown to reduce consumers’ use of health care. It is unclear whether people are avoiding wasteful care or putting off essential care that could prevent more serious disease.

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