HCCI’s 2014 Commercial Health Spending Report

The Health Care Cost Institute was formed by several commercial health plans to allow for a multi-payer analysis of spending, utilization and other trends.  The group has released its analysis of 2014 trends for employer-sponsored health benefits.  (HCCI Report)  The big picture is that per capita spending for this population rose in 2014 to $4967, and increase of 3.4%, exactly at the average growth from 2010 to 2014.  All the growth is attributable to increases in unit prices; utilization has actually declined.  The only category that saw an increase in utilization was generic prescription drugs, which was 3.1% higher.  All other categories declined, led by brand name prescription medications, at minus 15.6% and inpatient hospital use, at minus 2.7%.  On the other hand, average unit price rose for every category.  As you might expect, brand drugs led the way with a whopping 28.1% price increase, but generic prices also rose 3.3%.  Professional services, such as physician office visits, rose only 3.1%, but hospital inpatient admission prices showed an average 4.4% increase, or $780 per admission.

Out-of-pocket spending rose by 2.2% or $17.  It was an average $810 for the year, which was 16.3% of total spending.  So out-of-pocket spending as a percent of the total actually declined slightly.  Spending growth for men, 3.9%, was higher than for women, 3.0%; although women have higher actual spending, about $1085 per year on average.  The slowest growth rate was for adults aged 26 to 44; the fastest for young adults, age 19 to 25, at 3.9%; and adults 55 to 64, the same rate of growth.  The fastest growth was in the Northeast, 5%, and the slowest in the West, 2.4%.  The Northeast also has the highest spending, a per capita amount of $5232 while the West had the lowest, $4599.  High spending and high growth is a bad combination.  The moderate overall spending growth is not fully reflected in premiums for 2015 or 2016.  And it likely is due to continued penetration of high-deductible plans, which may be responsible for the decline in utilization in most categories.