Patient Responsibility News

Out-of-Pocket Healthcare Costs Rise as Utilization is Unchanged

Out-of-pocket healthcare costs for patients increased by 3.6 percent in 2016, despite the fact that service utilization stayed the same or, in same cases, decreased.

out-of-pocket healthcare costs

Source: Thinkstock

By Sara Heath

- Patient financial responsibility and out-of-pocket healthcare costs are increasing, despite the fact that healthcare utilization has remained stagnant, according to a recent report from the Health Care Cost Institute (HCCI).

HCCI’s 2016 Health Care Cost and Utilization Report analyzed cost and use patterns for patients up to age 65 who are covered by employer-sponsored health plans. The analysis revealed that out-of-pocket spending for patients rose 3.6 percent in 2016, a growth increase from 2.9 percent in 2015.

Patients paid an average total of $848 of their own money for their healthcare in 2016. This reflects an $88 increase since 2012, the researchers said.

This cost growth does not include increases in healthcare premiums, which separate analyses indicate have also grown exponentially.

Older adults faced higher out-of-pocket healthcare costs, with annual expenditures totaling up to $1,310. However, this population also saw the slowest growth of out-of-pocket costs.

Younger patients, on the other hand, saw major cost increases, particularly in outpatient services. However, this patient cohort still paid the least in out-of-pocket healthcare costs.

Rising patient financial responsibility reflects an overall increase in per patient healthcare spending, the report noted. In 2016, healthcare spending increased 4.6 percent, reflecting a per person cost of $5,407. Cost increases grew from 4.1 percent in 2015, and even more since 2012 to 2014 during which costs increased less than 3 percent.

These cost increases come as patient healthcare utilization remained stagnant, or in some cases, decreased. For example, outpatient services presented the largest year-over-year spending growth at 6.2 percent. However, ED visits only rose by 2 percent, and outpatient surgery use actually decreased by 6 percent between 2012 and 2016.

On the inpatient side, spending increased across all services by at least double digits, with growth ranging from 18 to 30 percent depending on the service. However, patient utilization dropped. Surgical admissions decreased by 16 percent, for example.

Prescription drug costs also increased between 2012 and 2016 by 27 percent, despite the fact that patient medication use declined. The problem is the higher prices, the report contended, noting that brand prescription drug prices have increased over the five-year research period.

Interestingly, the report noted a 6 percent decrease in spending on primary care provider services and an 18 percent decline in patient utilization. The researchers did not explore a cause for this trend, but hypothesized that patients were substituting PCP use with specialty care, the utilization of which increased. Health plan models and patient access to primary care may have influenced this shift, the researchers posited.

Patients will feel the impact of these spending increases, albeit in indirect ways, explained HCCI president Niall Brennan, MPP.

“While consumers, especially those with employer-sponsored insurance, may not feel the direct impact of these charges via out of pocket payments, they ultimately pay through increased premiums and decreased benefits,” Brennan said in a statement.

The healthcare industry must identify strategies to reduce overall healthcare costs. High patient financial responsibility presents a significant barrier to patient access to care. When patients face high out-of-pocket costs or extraordinary health payer premiums, healthcare becomes unattainable and patient health suffers.

The results of this report show that the benefits of value-based care are not yet being realized, Brennan added. When patients use healthcare less but still pay more, they are not receiving healthcare that emphasizes quality outcomes and cost-cutting strategies.

“It is time to have a national conversation on the role of price increases in the growth of health care spending,” Brennan concluded. “Despite the progress made in recent years on value-based care, the reality is that working Americans are using less care but paying more for it every year. Rising prices, especially for prescription drugs, surgery, and emergency department visits, have been primary drivers of faster growth in recent years.”


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