U.S. health care costs are rising faster than general inflation due to an increase in prices, not utilization, according to a ground-breaking report from the newly formed Health Care Cost Institute.
Rising U.S. health care costs - outpacing general inflation - are due to increased prices, not utilization, according to a report released today by the recently formed non-profit Health Care Cost Institute.
Per capita spending for care at inpatient and outpatient facilities, professional procedures and prescription drugs rose 3.3 percent in 2010, reported the non-profit institute, which analyzed claims for privately insured patients under the age of 65 from three of the nation’s largest private health insurance companies.
Rising U.S. health care costs are the source of significant financial concerns for Americans, even those in the highest wealth brackets, according to Millionaire Corner research. High net worth investors – those with investable assets of $5 million to $25 million – rank the costs of health care and long-term care among their top five personal financial worries. Nearly two-thirds are worried about the financial consequences of a spouse’s health issues, up from 59 percent last year, according to a study conducted in the first quarter of 2012. Nearly half are worried about the financial consequences of a family health catastrophe and 44 percent say they are worried about care in their “old age.”
A 5.2 percent increase in the price of hospital care and a 10.1 percent increase in ambulatory care were offset by a 3.3 percent drop in inpatient admissions and a 3.1 percent decline in the used of outpatient facilities, according to the institute, which examined more than 3 billion claims provided by Aetna, Humana and UnitedHealthcare. The findings reflect health care spending by more than 33 million Americans covered by employer-sponsored group health insurance.
Health care spending averaged $4,255 per person in 2010, with spending ranging higher for people in the 55 to 64 age bracket. Out-of-pocket costs increased 7.1 percent to $689 per person. The price for an emergency room visit rose 11 percent to $1,327 in 2010. Prescription drug prices grew 3 percent to an average of $82 per prescription, reflecting a 13 percent increase in brand-name drug prices offset by a 6.3 percent decrease in generic drug prices. Doctor visits, lab test, diagnostic imaging and other professional procedures increased by 2.6 percent, including a more than 5 percent increase for office visits.
As prices increased, usage dropped by more than 5 percent for hospital admissions, emergency room visits, radiology procedures and visits to a primary care provider. Brand name prescriptions dropped by nearly 4 percent, while generic prescriptions increased by 2.5 percent.
The 2010 increase in U.S. health care costs follows a 5.8 percent rise in 2009 and a 6 percent rise in 2008, according to the institute, formed in 2011 to enable researchers to analyze the causes behind rising U.S. health care costs.