Working Americans are using less care but paying more

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Most Americans have health coverage through their jobs, but that doesn’t mean they are better off when it comes to spending for their care, according to a five-year analysis of billions of insurance claims by the nonprofit Health Care Cost Institute.

In a study published Tuesday, HCCI found that working Americans used less healthcare but paid more for it every year from 2012 to 2016 — mostly due to double-digit price hikes for brand-name prescription drugs, inpatient surgeries and emergency room visits.

The study found that healthcare spending for those with commercial insurance reached a new high of $5,407 per person in 2016.

HCCI reviewed more than 4 billion insurance claims for about 39 million people younger than 65 who were covered through their jobs during the five-year period and found:

▪ Prescription drug spending rose by 27 percent, despite a flat or decreasing trend in generic drug prices and despite a decline in the use of brand-name prescription drugs.

▪ The average price of surgery that required an overnight stay rose by nearly $10,000 or 30 percent, to about $40,000, despite a 16 percent drop in surgical admissions.

▪ Emergency room visits increased by 2 percent, while the price of an ER visit that did not require an overnight stay increased by 31 percent to $1,917.

Consumers with workplace coverage may not realize it, but they will pay for these increases through higher premiums and reduced benefits, said Niall Brennan, president and executive director of HCCI.

“Somebody has got to pay for this,” Brennan said during a teleconference with reporters on Tuesday. “I think a lot of the discussion around rising premiums in recent years definitely implicates these price increases.”

Brennan said he suspects that prices have increased as hospitals and physician practices have consolidated into larger systems, giving them greater leverage when negotiating rates with insurers.

HCCI’s findings resonate with a national healthcare spending study produced by the federal Centers for Medicare and Medicaid Services in December, which predicted that almost all of the increase in health spending would be driven by price increases and not by greater use of services.

The fact that the price of healthcare can rise while demand drops is a peculiarity of the industry, Brennan said.

“I’m not sure that common sense necessarily applies,” he said, likening health spending to an inflated balloon.

“When you push in one part of the balloon,” he said, “it tends to expand elsewhere.”