Every year, I like to write about the Health Care Cost Institute's annual report on costs and utilization. The 2013 report was just released. There's a lot of interesting information in it:
This report, 2013 Health Care Costs and Utilization, is the fourth in a series of annual reports by the Health Care Cost Institute (HCCI) on the health care activity of individuals who are younger than age 65 and covered by employer-sponsored health insurance (ESI). The report’s study period (2011 -2013) covers the years after passage of the Affordable Care Act (ACA) and prior to the opening of health insurance exchanges. As in previous years, the report details the levels and changes in per capita expenditures (“spending”), utilization (“use”), and prices of medical and prescription services used by the ESI population. Also, for the first time, it details patterns of spending and service use by age-gender groups of the ESI population.
One of the nice things about the HCCI report is that it tracks spending in the employer-sponsored health insurance market, which covers a majority of people in the United States. Often, databases cover government or public programs, so these data give is a different picture than others might provide.
Overall health care spending only rose 3.9% in 2013. In fact, health care spending since 2010 has grown by 3.9% a year. That's somewhat remarkable given the grown in spending in the decade before.
Some factors seen in 2011 and 2012 continued in 2013. About 20% of spending was on acute inpatient care, and 28% was on outpatient care. An additional 34% were for professional services, and 17% were for prescriptions. Outpatient services were the fastest growing sector of spending, but growth slowed last year to 5.2%. Spending on professional services grew only 0.8%, mostly because of increased utilization.
Generic drug use went up once again, by 4.5%. This raised overall generic drug use to 83.3% of prescription filled days.
Inpatient care saw a number of decreases. Admissions, outpatient visits, and outpatient services all went down. The use of brand name drugs used in the inpatient setting also decreased, by more than 15%.
However, some spending decreases were compensated for by increased pricing. For instance, inpatient admissions, outpatient visits, and brand prescription prices all went up, moderating some of the effects of decreased utilization. Admissions went down by 2.3%, but prices for them went up by 5.7%. Outpatient visits went down by 0.8%, but prices went up by 6.4%. And, as I mentioned above, inpatient brand name drug use went down more than 15%, but prices went up by more than 21%.
This means that, once again, the increases we're seeing in health care spending aren't driven by using "too much" of it, or even "more" of it. We're consuming less and less each year. It's the prices. They go up even faster than the utilization goes down. As long as that happens, we're going to continue to spend more on health care, even as we become more discriminating consumers of it.
Of course, the first full year of the Affordable Care Act's real changes were in 2014. This report covers 2013. To see if it had any real effect on health care spending, we'll need to wait until next year's report. It's not quite clear how the ACA will affect spending in the employer-sponsored insurance market, which it doesn't affect too much, but many are hopeful that we'll see something. We'll know a year from now.