Out Of Pocket Health Care Spending On The Rise
September 24, 2013

Out-Of-Pocket Healthcare Spending On The Rise

Brett Smith for redOrbit.com - Your Universe Online

If out-of-pocket expenses for healthcare seem like they are cutting into your wallet more than ever, it’s probably because they are.

A study released Tuesday by the Health Care Cost Institute (HCCI) showed that out-of-pocket expenses rose more rapidly than expenditures per person in 2012, by 4.8 percent or about $770 per person.

The comprehensive report also found that Americans are increasingly opting for more generic drugs and choosing less expensive health care options, which partially accounted for keeping the national overall medical spending stable.

“Although average health care expenditures grew at nearly the same rate in 2012 as 2011, the causes of the 4 percent increase in spending each year were quite different,” said HCCI Executive Director David Newman.

“In prior years, rising health care prices drove up spending. In 2012, we saw utilization start to change health care trends for prescription drugs and professional procedures. Preliminary evidence suggests this may be indicative of a larger shift in care as people search for lower cost care alternatives.”

Several medications came off patent during the past couple years and as a result became available as generic drugs, noted Carolina-Nicole Herrera, the institute's director of research. The shift to generics may also be due to people on high-deductible insurance plans selecting cheaper medications. Herrera also cited some cardiovascular drugs that recently came off patent.

"It also means many more people are at least purchasing their medications," Herrera told USA Today, suggesting that people are actually taking the medications being prescribed by a doctor, instead of delaying treatment because of costs. "That could mean long-term costs might be less."

The HCCI director added that some of the spending increase is a result of more people gaining access to care. Herrera said the increase in preventive health care visits and the use of generic drugs point to lower overall costs.

In an interview with Forbes, Herrera said the cost of inpatient care, largely in hospitals, has decreased due to more procedures being done in clinics, health centers and other outpatient facilities.

“People are trying to avoid going to hospitals because that is where we see our sickest patients,” she told Forbes. “(Hospitals are) where care is most expensive. We are seeing a rise in visits to primary care providers.”

The Affordable Care Act is designed to encourage patients to use primary care providers as well as wellness services in lieu of hospitals.

Some observers have noted changes in the private sector that could account for the slowed rate of healthcare spending. For example, some employers have increase plan deductibles, co-payments and other forms of co-insurance – forcing patient to spend more out-of-pocket.

The HCCI report also found a widening gap between women’s and men’s healthcare expenses. Although women traditionally spend more on healthcare than men, they saw a 4.2 percent increase from 2011 to 2012 – compared to a 3.7 percent increase for men.

The report also noted that healthcare spending from young adults grew the fastest – with a 5.4 percent increase for young adults between 19 and 25 compared to a 2.5 percent increase for adults 55 to 64.