Employer-Sponsored Health-Care Spending Rises to Highest Point in 2016

According to an annual report by the Health Care Cost Institute (HCCI), employer-sponsored health-care spending increased to the highest point in 2016, mainly because of rising health-care costs. “Working Americans are using the same or less health care and are paying more and more for it every year,” said HCCI President Niall Brennan, MPP.

Spending per person in 2016 grew 4.6 percent from 2015 to $5,407, while in 2015, spending grew 4.1 percent from the previous year. Health-care spending per person grew cumulatively by 15 percent between 2012 and 2016.

HCCI based its findings on claims data for 39 million U.S. patients under age 65 who were enrolled in employer-sponsored health insurance from 2012 to 2016. The data represent about one-quarter of all people covered by employer-based insurance and was obtained by insurance companies, including Aetna, Humana, Kaiser Permanente, and UnitedHealthcare.

In 2016, this increased spending was driven mostly by the cost of outpatient services, such as emergency room (ER) visits and surgeries, and prescription drug prices. Per-person spending on outpatient services reached $1,507 in 2016, representing an increase of 6.2 percent from 2015. Spending on prescription drugs totaled $1,030, which was up 5.1 percent from the previous year; however, this was less than the 10.4 percent growth seen in 2015.

Spending on professional services, including physician visits, drug administration, anesthesia, radiology, and pathology, rose 3.5 percent to $1,821.

Despite these increases, the use of most health-care services has held steady or declined overall from 2012 to 2016. Mr. Brennan attributed this to the effects of the economic recession or the migration of workers toward high-deductible health plans, which Americans may find difficult to afford. In addition, the prices of health-care services have risen enough to offset any decreases in health-care use, the researchers found.

The study results also showed large price increases for administered drugs (up 42% to $581 on average) and outpatient ER visits (up 31% to $1,917 on average) during the study period.

Source: Modern Healthcare, January 23, 2018.