Patient Responsibility News

Out-of-Pocket Patient Spend Soars as Utilization is Unchanged

Out-of-pocket patient spending increased by 2.6 percent and overall spending increased by 4.2 percent, an HCCI report noted.

out-of-pocket patient costs

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By Sara Heath

- Healthcare costs and out-of-pocket patient spending is increasing, despite consistent healthcare utilization, according to the Health Care Cost Institute (HCCI) 2017 Health Care Cost and Utilization Report.

The report, which looked at claims data for about 40 million individuals on employer-sponsored health plans, revealed that healthcare spending is continuing to rise.

“Health care spending growth exceeded 4 percent for the second consecutive year, outpacing percapita GDP growth,” Niall Brennan, president and CEO of HCCI, said in a statement. “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 4.2 percent per person spending growth does mark a slowdown in cost increases, the report authors noted. Between 2015 and 2016, costs increased by 4.9 percent. However, spending is still at an all-time high of $5,641.

Out-of-pocket patient spending has taken a considerable hit amidst this overall increased spending. Per-person financial responsibility increased by 2.6 percent in 2017. This growth was slower than overall spending, underscoring the fact that out-of-pocket costs were a smaller share of all healthcare spend in 2017.

READ MORE: Clinicians Doubt Patient Care Access, Costs Reduction Progress

Nevertheless, patient costs have been continuously on the rise since 2013. During the 2013 to 2017 time period, out-of-pocket spending increased by 12.2 percent, or $94.

Those totals do not include premium spending for individuals, meaning it does not offer a full scope of healthcare costs. Separate data suggests premium spending is extremely costly, adding significantly to total out-of-pocket patient spend.

High healthcare spend is likely because of high healthcare costs, the report authors explained. Average prices increased 3.6 percent in 2017. And although healthcare price increases decelerated in 2017 – costs increased 4.8 percent in 2014, compared to the 3.6 percent surge in 2017 – more work is necessary to entirely reverse direction.

Spending increases varied depending on the healthcare specialty, the report authors continued. For example, spending for professional services increased 13 percent between 2013 and 2017. Physician administered drug costs grew by 45 percent during that time period, despite consistent patient utilization.

Conversely, psychiatry services saw cost growth (25 percent) amidst increases in utilization. Between 2013 and 2017, psychiatry services utilization increased by 18 percent.

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For inpatient healthcare services, cost growth outpaced utilization. In fact, utilization dropped 5 percent during the study period, while costs climbed 10 percent.

Spending, utilization, and healthcare prices increased for inpatient mental health services. Admissions for this type of care increased by 18 percent between 2013 and 2017, which in part drove healthcare spending. During that time period, costs also increased by 39 percent, another significant factor in the spending increase.

Per-person spending on outpatient visits and procedures grew by over 5 percent. This was the largest-growing service category, the report authors noted.

This growth came from higher spend on outpatient surgeries and ED visits. Price of outpatient surgeries increased by 14 percent between 2013 and 2017, while costs for ED visits increased by 24 percent.

However, utilization actually shrank 4 percent during the study period. Meanwhile, costs for ED visits increased by 24 percent, while utilization increased by 10 percent, totaling to massive spending increases.

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Drug spending also soared during the study period. Overall drug spending increased by 4.7 percent between 2016 and 2017, and 29 percent between 2013 and 2017.

This comes even as medication utilization remained largely unchanged between 2013 and 2016. Utilization saw a slight 3 percent increase by 2017. However, data suggests the massive spending increases stem from rising drug prices.

HCCI said drug spending estimates did take into account discounts from the list price but did not include manufacturer rebates.

Certain subgroups yielded significantly different utilization rates, the report continued. For example, over 40 percent of younger patients ages 18 to 25 yielded no claims for clinic visits or prescriptions between 2016 and 2017. Conversely, only 18 percent of those ages 55 to 64 could say the same.

Patients with chronic conditions also yielded significantly higher healthcare spend. In 2017, patients with one of five chronic conditions, including hypertension, asthma, diabetes, attention deficit/hyperactivity disorder, and congestive heart failure, yielded a $8,921 price tag.

Those with no chronic conditions cost the healthcare system an average of $3,603 between 2016 and 2017.

“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.

It has long been known that patients managing chronic illness make up the bulk of healthcare spending, underscoring the importance of coordinated care management, patient engagement, and other cost-cutting strategies.

Moving into the future, healthcare policymakers can use this information to propose new methods for caring for patients with chronic illness or other costly health needs, stated Jeannie Fuglesten Biniek, senior researchers and report co-author.

“These trends can inform specific efforts and policies to curb health care spending growth,” Fuglesten Biniek concluded.


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