Per capita healthcare spending in the US employer-sponsored insurance population grew by 4.6% in 2015, according to latest Health Care Cost Institute report.
Implications | US per-capita healthcare spending in the employer-sponsored insurance population surged primarily on price increases across all categories, with prescription drugs rising fastest, according to the latest Health Care Cost Institute (HCCI) report. Within each therapeutic segment, the largest gain in price was for anti-infectives, whose prices more than doubled from USD35 in 2012 to USD83 in 2015, with an average annual price increase of 35.7%. |
Outlook | The HCCI has highlighted the rise in healthcare expenditure across the categories despite declines in utilisation rates in areas including brand-name prescription drugs and ER visits. Private and public payers are likely to keep putting pressure on service providers and drug manufacturers to manage escalating prices in the United States. |
Healthcare expenditure per capita in the US private sector has increased 4.6% year on year (y/y) in 2015 to USD5,141, according to the latest report by the Health Care Cost Institute (HCCI), "2015 Health Care Cost and Utilisation Report". Health spending growth among the employer-sponsored insured (ESI) population was more subdued in previous years, at 3.0% in 2013 and 2.6% in 2014. The HCCI report utilises data from nearly 3.7 billion insurance claims collected from four US insurance companies – Aetna, Humana, Kaiser Permanente, and UnitedHealthcare – for almost 40 million Americans covered by employer insurance (or 26% of the privately insured population in 2015). The surge in 2015 was primarily on price increases across all the categories. The slowest rates of growth over the four-year study period between 2012 and 2015 was for acute inpatient admissions, while the fastest was for prescription drugs.
Per capita out-of-pocket (OOP) health spending also grew by 3.0% in 2015 to USD813, lagging overall spending so reducing the proportion of OOP spending by consumers to 15.8% of total spending, down from 16.2% the previous year. According to the report, this was mainly due to declining OOP expenditure on brand-name and generic prescriptions. Average OOP per capita spending was USD61 on brand-name drugs, and USD96 for generic drugs in 2015.
Prescription drug spending
Among the spending categories in the study – including professional services, out-patient services, and acute in-patient admissions – prescription drugs represented 20% of total spending and had the lowest per capita spend, at USD964 in 2015. However, the category posted the fastest growth rate of any service in 2014 and 2015. Per capita expenditure on branded drugs was more than double that on generics at USD649 versus USD313 in 2015, despite rising utilisation rates for generics (3.0%) between 2012 and 2015, and declining rates for brand-name drugs (-14.2%) during the same four-year period.
In 2015, brand-name prescriptions registered a significant increase in per capita spending (USD66), mainly on increased spending on hormones and synthetic substitutes (USD22) and anti-infective agents (USD20), which represent the two largest therapeutic categories in terms of per capita drug spend (USD134 and USD101, respectively, in 2015). The steepest rise in price per filled day was for anti-infectives, where prices more than doubled from USD35 in 2012 to USD83 in 2015 – an average annual price increase of 35.7%. Meanwhile, over the same period, utilisation of brand-name anti-infectives dropped nearly 7.3% annually.
By contrast, spending on generic drugs increased by USD10 per capita in 2015, the smallest dollar increase of any of the categories, mainly on higher spending on central nervous system agents (USD2) in 2015, the largest category in terms of spend (USD97 in 2015). Meanwhile, the largest gain in spending between 2012 and 2015 was for generic skin agents (USD14 to USD30), the category with the highest price per filled day in 2015 (USD6), whereas all the other categories were USD2 or below.
Other notable trends
The report highlighted other notable trends across the other healthcare categories, including declines in primary care physician visits (PCP) during the study period – a 4.7% average y/y drop. Meanwhile the number of office visits to other doctors including specialists, and preventive visits to PCPs and specialists, increased between 2012 and 2015. The report also noted a decrease in emergency room visits from 180 per 1,000 insured in 2012 to 173 per 1,000 insured in 2015.
The full report can be found here.
Outlook and implications
Pricing played a bigger role in spending expenditure growth rates within the private sector in 2015 than in previous years, according to HCCI senior researcher Amanda Frost. Specifically, spending on prescription drugs rose faster than any other health service, and brand-name drugs in particular realised an 11.4% increase in per capita spending in 2015, attributable to price rises rather than utilisation rates. Meanwhile, the price of ER visits climbed 10.5% in 2015, the price of administered drugs (such as chemotherapy) increased 12.5% y/y, and the average price for an acute hospital admission gained around USD1,000 annually to reach USD19,967 in 2015.
The report also notes the steadily rising OOP spend resulting from deductibles, co-pays, and co-insurance payments made by consumers, totalling USD813 per capita in 2015. There were variations in the 18 states included in the study, with the lowest OOP spending recorded in the District of Columbia (USD636) and the highest in Texas (USD983).
The HCCI has highlighted the increase in healthcare expenditure across the categories despite declines in utilisation rates in various areas including brand-name prescription drugs and ER visits. However, the price for services and brand-name drugs has soared, offsetting declines in utilisation. It is in the interest of both private and public payers to keep putting pressure on service providers and drug manufacturers to manage escalating prices in the United States – a trend that will likely continue.