A sudden sharp increase in medical care points to average cost hikes, not average usage
San Francisco, CA -- (SBWIRE) -- 10/02/2012 -- A study shows that the sudden accelerated increase in health care costs is from price growth, not individuals seeking treatment.
From 2009 to the start of 2011 health insurance grew moderately, but in the last twelve months there has been a sudden increase. The 4.6% increase in 2011 was recorded for those spending for private health insurance.
That rate is greater than economic growth, which stood at 3.8%. In 2010, the average insurance cost for a patient was $4,547. In 2011, that number rose to an average of $4,547, or just under $200. The numbers may indicate that the downturn in recent spending may have been due to the economic climate rather than a national shift.
“We don’t know yet whether this is a one-off year aberration or a resumption of patterns of higher growth,” said Health Care Cost Institute Director David Newman. “We just don’t know. When you have one data point, you’re cautious.”
The HCCI used data spanning 40 million citizens who used private insurance providers. Public insurance programs were not included in the study. Those statistics will be available in early 2013.
“One thing Americans should realize is they’re actually not heavier users of health care compared to Germans or Canadians,” said Uwe Reinhardt, a health economist at Princeton University. “Utilization in the United States really isn’t that different.”
The accelerated growth in health care costs mean that overall spending will likely increase.
An average ER visit rose 5.4% over the last year, reaching $1,381.
Procedures rose 3.3% and prescription costs made a large jump to 17.7%.
“We’ve done a good job cutting back on length of stay,” Newman said. “But if quantity is cut back and prices are going up, you’ll still see overall spending increase.”
Some economists state this reflects a market which has little pressure from insurance companies to lower costs of medical care.
“No insurer wants to be known as being obsessively aggressive against price increases,” said Gerard Anderson, director of the Johns Hopkins University’s Center for Hospital Finance and Management. “If you’re an insurance company, you stand to lose a large client [the hospital] all to gain a small rate reduction.”
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