Per-Person Health Care Spending Grew 4.2% in 2017, Driven Mostly by Prices
Outpatient services had highest spending growth in 2017, increasing 5.1%
WASHINGTON (February 12, 2019) — Average annual health care spending for individuals with employer-sponsored insurance increased to an all-time high of $5,641 in 2017, despite little change in the utilization of services overall, according to the Health Care Cost Institute's annual Health Care Cost and Utilization Report. While overall spending growth slowed in 2017 compared to 2016, the report finds that prices continued to drive rising costs.
"Health care spending growth exceeded 4 percent for the second consecutive year, outpacing percapita GDP growth," said Niall Brennan, president and CEO of HCCI. "And for the most part, Americans aren't using more health care services, which means we're essentially paying more and more for the same amount of health care."
The report examines four groups of health care services and dozens of sub-categories. While prices drove spending growth across the board, the role of utilization varied among categories:
Health care use and spending differences for certain sub-groups varied considerably:
The report's authors emphasized the insight to be gained from the observed variation. "Diverging trends across several sub-categories of services provide important context for where and to whom these health care services are being delivered," said John Hargraves, senior researcher and a coauthor of the report.
Jeannie Fuglesten Biniek, senior researcher and co-author of the report, added, "These trends can inform specific efforts and policies to curb health care spending growth."
Methodology. Since 2011, HCCI has tracked, independently analyzed, and reported health care spending, utilization, and prices each year in its Health Care Cost and Utilization Report, using deidentified claims data of people up to age 65 with employer-sponsored health insurance. HCCI analyzed data from about 4 billion claims of more than 40 million individuals. Claims data come from four of the largest health insurance providers in the U.S. — Aetna, Humana, Kaiser Permanente and UnitedHealthcare — representing about 26 percent of the employer-sponsored insured population. For this year's report utilization and price measures for three of the four service categories (the exception being prescription drugs) were adjusted to account for changes in the mix of services provided in each category, and therefore, facilitate comparisons across years. Further, measures of drug spending reflect discounts negotiated from the wholesale price of drugs but do not include manufacturer rebates that are provided through separate transactions. Thus, drug prices reflect the point-of-sale prices.
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