2012 HCCI Cost Trend Report

So much of the work on health care utilization and spending has been done based on Medicare data and the Health Care Cost Institute, which was founded by and has data from and number of large commercial health plans, has done a very good service in rectifying that.  The Institute has released its report on 2012 spending, which covers persons under 65 with employer-sponsored insurance.   (HCCI Report)   For 2012, overall per capita growth was 4% to $4701 annually.  This was a slight decrease from 2011’s 4.1% growth, but still higher than either GDP growth or the rate of general inflation.  Among major service categories, hospital inpatient had a 2.4% per capita increase, which was comprised of a 2.9% decline in admissions, but a 5.4% increase in prices paid.  Outpatient facility spending rose by 7.4%, with a 1.4% growth in utilization and a 6% gain in prices.  Outpatient testing grew 5.1%.  Professional fees, primarily to physicians, showed only 3.1% growth, with utilization increasing 1.9% and prices only 1.1%.  Prescription drug use increased 7.7% for generics but declined 20.7% for brand name drugs.  Prices for generics rose 5.3% and 25.4% for brand names.  The generic drug price increases are leading to higher overall spending in this category.  Out-of-pocket spending grew 4.8% while the payer portion rose only 3.8%, reflecting continued growth in high-deductible and higher copay plans.  Per capita spending by women grew faster than for men and spending by young adults and children was relatively slower than that for other age groups.  The Northeast has both the highest per capita spending and the fastest growth while the West has the lowest spending and slowest growth.  Overall the report reflects the general slowdown in spending, with prices still increasing at a rate that should be concerning.  The effect of reform on spending growth in 2014 is unclear.  Most people will still be in plans with higher cost-sharing, but more people supposedly will be insured, which might raise per capita utilization.