Employees Spending More On Medical Services, Less On Drugs

Spending on medical services for people enrolled in employer-sponsored health plans increased 44% between 2007 and 2016, according to researchers from the Health Care Cost Institute (HCCI).

Out-of-pocket spending among people enrolled in employer-sponsored coverage increased approximately the same amount, rising 43% over the study period.

That said, “growth patterns were similar across categories,” the authors wrote in a study published in Health Affairs. The distribution of overall spending by service didn’t change significantly over time, with one exception: Spending on outpatient services outpaced all others, growing an average of 5.7% per year.

Unlike total spending, the distribution of spending on out-of-pocket costs did change. Surprisingly, out-of-pocket spending on prescription drugs decreased, accounting for 32% of spending in 2007 and 18% in 2016.

“The savings from lower out-of-pocket spending on drugs were offset by increases in the spending on the medical service categories,” the study reads, concluding that “the out-of-pocket spending burden has shifted away from prescriptions and to medical services.”

The findings were calculated using HCCI’s national sample of claims data.

Per capita spending also rose overall, from $3,752 in 2007 to $5,394 in 2016, though not consistently. The fast growth that occurred between 2007 and 2009 slowed between 2010 and 2014, then picked up pace again in 2015 and 2016.

The slowdown suggests the Great Recession of 2009 “affected all aspects of the health care system.”

Kevin Kennedy, who co-authored the article, said this possibly “suggests a case mix shifting, or prices going up, or different technologies being used.” But this study doesn’t “dig into the whys,” he said.

“This is a good paper to pinpoint good research topics without having to study … topics that might not prove fruitful at the end,” he added.


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