Here’s a question worth pondering: If the general economy continues to struggle, why was there such a big jump in healthcare costs in 2011?
Spending among those with employer-sponsored insurance grew more than expected in 2011, according to a new report from the Health Care Cost Institute.
HCCI’s Health Care Cost and Utilization Report: 2011 found that average dollars spent on healthcare services climbed 4.6% in 2011, reaching $4,547 per person. This was well above the 3.8% growth rate in 2010.
Consumers spent more of their own dollars on health care in 2011, with out-of-pocket spending growing to $735 per person — a $32 increase from 2010 — while costs covered by insurance grew at nearly the same rate, the HCCI report said.
Health care costs had been on a downward trajectory — they slowed from 5.8% in 2009, to 2010’s 3.8%.
With the economy being as sluggish as it’s been, many expected that downward trajectory to continue.
What’s the cause? HCCI Governing Board Chairman Martin Gaynor didn’t have a clear answer. “It’s hard to know whether this means spending levels are going to continue rising, (but the 2011 numbers are) a signal that we have to pay attention to,” he said.
“We need to continue studying these data to see whether this acceleration in spending growth is the beginning of an upward trend that will return us to pre-recession levels.”
Where the growth was
Prices rose for all major categories of health care — hospital stays, outpatient care, procedures and prescriptions — outpacing an uptick in the use of many of these services.
The hike was partly offset by a slowdown in spending on prescriptions, which grew just 1% from 2010 to 2011, rising to $773 per capita.
Other report highlights:
- Regional spending gap widening: HCCI analyzed spending in the four major U.S. Census regions. The Northeast had the highest per capita spending ($4,659) while the West had the lowest ($4,358). The gap in spending between the two regions grew, widening from $232 in 2010 to $301 in 2011.
- Spending on children’s health care rising fastest: As in 2010, per capita spending on children 18 and under grew much faster than spending on other age groups. In 2011, the growth rate of spending on children increased 2.1% percentage points to 7.7% — more than twice the rate of the spending for those aged 19-44 and 55-64.
- Cost sharing between patients and payers remains stable: Spending on health care was split between consumers and insurance companies in much the same way as previous years, with insurers paying for 83.8% of total expenditures and insured enrollees contributing 16.2%. Payers contributed $3,812 per person in 2011.
- Use of outpatient and health care services up: In 2011 compared to 2010, people with employer-sponsored insurance used more outpatient services and had more procedures performed. Visits to the emergency room (ER) increased 3.7%. However, they had fewer hospitals stays and filled prescriptions.