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Spending on insurance plans has increased nearly 50%, a new report says

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David
Hilowitz


  • The US total healthcare spending has increased, and the trend
    is expected to continue. 
  • A new study showed that spending on health services for those
    with employer-sponsored insurance plans increased by 44% over the
    past decade. 
  • Brand-name prescriptions, emergency department visits, and
    outpatient surgery were the categories that accounted for the
    greatest proportion of spending increases. 

The US is spending more on healthcare than ever before. 


A new study
published in Health Affairs on Wednesday found
that total spending on health services, excluding premiums, for
those with employer-sponsored insurance plans increased by 44%
from 2007 to 2016.

Researchers found that spending increased across all major
categories of health services, although the amount each category
increased by varied. The costs of services rising also plays a
role in the increase in total spending. 

The study was done by using a national sample of 40 million
health care claims data from the Health Care Cost Institute, and
included contribution from insurers Aetna, Humana,
Kaiser Permanente, and UnitedHealthcare
.

About half of the US population is covered under
employer-sponsored insurance, according to Niall Brennan,
president of Health Care Cost Institute. This survey captures
about a quarter of that population. 

Enrollment in high deductible health plans grew from 5% in
2007 to 29% in 2016. Overall, Brennan estimates that overall
insurance coverage has gone up for people both with and without
employer-sponsored insurance. 

Brand-name prescriptions, emergency department visits, and
outpatient surgery accounted for nearly half of the spending
increase. Out of pocket spending rose 43%, attributed to
emergency department visits. Brennan said outpatient
surgeries are increasing because they tend to be a substitution
for hospitalization. Hospital outpatient service spending
(including non-overnight care and surgeries) increased more
rapidly than other types of services. Prescription drug spending
is driven by the introduction of new and innovative drugs, but
also the persistent increase across all types of
drugs. 

Brennan said this trend feeds into the key issue of unconstrained
growth in healthcare spending. With the increasing amounts of
mergers and acquisitions in the healthcare space, hospitals are
taking over other hospitals and private practices. With this,
insurance agreements and service charges change so patients can
end up paying more for the same services from the same doctors in
a large hospital system than they did in a private
practice.  

Competitive dynamics between hospitals can also make it harder
for insurers to negotiate down prices.

This trend is forecast by the Center for Medicare and Medicaid
Services to continue. Right now, healthcare spending accounts for
about 17.5% of the GDP. In the next 8-10 years, it’s predicted to
rise to 19.2%. 

See also:


Business Insider Intelligence Exclusive FREE Report: The 5 Ways AI Will Change U.S. Healthcare


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