Healthcare spending declined dramatically in 2020 thanks to the COVID-19 pandemic, but expenditures rebounded the following year, according to new data from the Health Care Cost Institute.
The group released its annual look at cost and utilization trends last week, which found the average health spending for people with employer-sponsored coverage reached $6,457, up 15% from the 2020 average of $5,630. Spending declined by 4% in 2020 as utilization decreased, the researchers said.
John Hargraves, director of data strategy at HCCI, told Fierce Healthcare that the 2020 data are an aberration in the long-term spending trends, which had grown steadily prior to the pandemic.
“It’s almost like 2020 is a missing data point in the long-term growth in the healthcare spending and use patterns that we’ve noted,” Hargraves said.
HCCI’s data are based on a collection of claims from major commercial payers including Aetna, Humana, Kaiser Permanente and Blue Health Intelligence.
Care utilization increased by 13% between 2020 and 2021, according to the report, following a 7% decline from 2019 to 2020. Prices grew by 2% on average during that window, reflecting the pandemic-driven delays in low-cost preventive services.
However, healthcare prices have climbed by 21% overall between 2017 and 2021, with the largest increase for inpatient hospital care, according to the report. Hospital prices grew by 28% in that four-year window, even as utilization of inpatient care declined.
Aditi Sen, Ph.D., director of research and policy at HCCI, told Fierce Healthcare that trend should raise some eyebrows. She said that while drug prices get the lion’s share of the political attention, hospital expenditures count for a large portion of health spending, and prices are only increasing.
“It’s even more concerning to me there’s nothing really reining in those prices,” Sen said.
That said, spending on prescription drugs is certainly on the rise as well, according to the report. Per-person spending on prescription drugs, based on the cost at the point-of-sale, rose 29% between 2017 and 2021.
Spending increased the most on immunocological therapies, according to the report, and these drugs also saw the largest prices increases in tandem. The next-highest spending increase was for hormone therapies, which includes insulin, birth control and thyroid condition treatments, according to the report.
Hargraves noted that prescription drugs did not see the same decline in utilization that other health services did during the height of the COVID-19 pandemic.
“Drug spending was the area that didn’t really have a 2020 effect,” he said.
Sen said that while these figures may not be alarming on their face, the data come from employer-sponsored health plans, which typically have the most generous coverage. People enrolled in other types of coverage, such as Medicaid, the individual market or Medicare, likely face higher costs and spend.
This level of spending has “real implications at the point of care for patients even with very generous health insurance,” she said.
“We could make the argument that little green bar is not a huge percent, and that’s because their insurance is generous and serving its purpose,” she said.