Advocates for Evidence-Based Health Policy Speakers
ESI Mirrors Overall Health Spending
A majority of Americans receive employer-sponsored insurance (ESI) and in 2016 private payers spent $1.12 trillion, far exceeding the $672 million in Medicare spending. However, trends in commercial spending have previously been unexplored due to the limited availability of claims data. New research analyzes trends using Health Care Cost Institute data, which accounts for over 25% of the ESI population (40 million enrollees).
From 2007 to 2016, per-capita annual ESI spending increased by 44% (or 23% adjusting for inflation) from $3,752 to $5,394, with an average annual growth rate of 4.1%. Growth rates decreased from 2010 -2014, consistent with the slowdown in health spending after the 2009 recession and spending patterns of public and private payers.
Per-capita spending increased for all categories including inpatient services, outpatient facility fees, outpatient professional services, and prescription drugs. Spending increases mirrored trends in overall health spending, with the exception of prescription drug spending, which increased sharply in 2014-2015 before stabilizing in 2016. Spending on outpatient services, including facility and professional services, accounted for the largest share of spending (60% in 2007 and 62% in 2016), and increased by 64% (or 40% inflation-adjusted), exhibiting the largest magnitude increase relative to other categories. Of note, ED visit spending increased by 85% after inflation. Conversely, inpatient per-capita spending decreased from 21% in 2007 to 19% in 2016 and had substantially less spending growth relative to other categories. The authors suggest overall spending increases were largely driven by price effects, as opposed to technology or demographic changes.
Per-capita out-of-pocket spending increased 43% (or 22% inflation-adjusted) from 2007-2016, mirroring the overall increase in health spending. The share of spending by enrollees did not change over the study period, which was surprising given the increased prevalence of high-deductible health plans. However, the distribution of out-of-pocket spending changed: the largest increase in out-of-pocket spending was for ED visits (5% increase), accompanied by a decrease in prescription drug spending (from 32 to 18%). Further research is needed to examine the impact of benefit design on out-of-pocket spending, and to inform potential solutions to unabated increases in health care spending.
Abstract
Using a national sample of health care claims data from the Health Care Cost Institute, we found that total spending per capita (not including premiums) on health services for enrollees in employer-sponsored insurance plans increased by 44 percent from 2007 through 2016 (average annual growth of 4.1 percent). Spending increased across all major categories of health services, although the increases were not uniform across years or categories. Growth rates for total per capita spending generally slowed after 2009 but increased between 2014 and 2016. Spending on outpatient services grew more quickly (average annual growth of 5.7 percent) compared to spending on the other types of services. However, the overall distribution of spending across categories remained largely unchanged. In the context of the dramatic economic and policy events that have taken place since 2007-including the Great Recession, the Affordable Care Act, and numerous medical innovations-this assessment of ten-year spending trends provides insights into how the largest insured population in the US contributes to health care spending growth.
PMID: 30230917
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