News

Healthcare Utilization Drops, Spending Increases in 2013

By Ryan Mcaskill

A new study from HCCI found a 3.9 percent increase in spending from privately insured Americans.

- According to a recent study from the Healthcare Cost Institute, privately insured Americans spent more on medical services in 2013 even though they used fewer of them. Spending per enrollee in employer health plans grew by 3.9 percent and continued a moderate growth trend that began in 2010. However, this is happening despite dropping utilization.

The report found that health care spending averaged $4,864 per enrollee in 2013, which is up $183 from 2012. Consumers spent an average of $800 per person out-of-pocket, which is a 4 percent increase over 2012.

“Price growth for medical services and brand name drugs remained strong in 2013,” HCCI Executive Director David Newman, said in the report. “Health spending grew moderately, but that was only because consumers used fewer services.”

The study found that out-of-pocket costs, including co-payments and deductibles paid directly by consumers, remained stable as a percentage of overall spending. Some services did decline as brand prescription drugs, inpatient admissions and outpatient services dropped in 2013, despite price increases.

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  • Inpatient services – Acute inpatient hospital admissions fell 2.3 percent while prices rose 6.7 percent, causing overall inpatient spending to increase 3.8 percent. The average price per-admission grew $1,067 to $18,030.

    Outpatient services – Outpatient visits dropped 0.8 percent while prices rose 6.4 percent. Total outpatient visit spending grew 5.5 percent.

    Brand name drugs – Use of brand name prescriptions dropped 15.5 percent, while the average price per fill increased more than 21.2 percent. Total spending on brand name drugs grew 2.4 percent.

    “Differences in spending and use across these groups and relevant not only to the insured, but also to employers and policymakers interested in health care trends during this pre-exchange period,” the report concludes. “For 2013, HCCI found that utilization rose for some services and populations affected by the ACA, including preventive visits and contraction, but these services generally contribute little to overall spending.”

    It added that ESI spending increased at a similar rate to what was experienced in 2011 and 2012. In both of these years, rising medical and brand prescription prices led to spending growth. However, unlike those years, declining utilization in 2013 offset price increases, keeping expenditure growth historically slow.

    The report also includes some trends to watch. Most noticeably was the break in spending growth that has been seen in recent years when it comes to out-of-pocket spending for adult women (ages 19-44). 2013 was the first year that an increase in this spending was not reported for young women (0.0 percent ages 19-25) and a significant drop (6.4 percent down to 3.2 percent)  for intermediate adult women (ages 26-44).

    This break in trend is related to changes in out-of-pocket spending on contraceptive prescriptions. Out-of-pocket spending per capita by adult women on generic contraceptives fell 61 percent to $20 and 21 percent to $33 for brand contraceptive spending. At the same time, use of contraception increased slightly for adult women because the Affordable Care Act has been in place for a full calendar year, which requires full coverage (no-cost sharing) of some preventative services including contraception.