Health care spending is up. Way up. That’s because prices are up — not because we’re using more health care, according to newly published data from the Health Care Cost Institute.
The numbers that matter: Health care spending grew by 4.5% from 2015 to 2016, yet utilization was steady — or, in some cases, actually declined — during the same period. According to HCCI’s analysis, which is limited to employer-sponsored coverage, the increase in spending was driven by steep increases in prices.
- Spending on prescription drugs is up 27% since 2012, driven by a roughly 25% jump in prices.
- Prices for emergency-room care rose by about 30% over the same period.
Context: Other studies have come to similar conclusions. But one person’s prices are another person’s salary, and that’s why it’s so difficult to find any sort of political mechanism to keep price increases in check.
- Conservatives want to bring down prices by making consumers responsible for more of their own health care costs, hoping to create something that looks more like a traditional consumer-goods market. But recent research suggests that approach doesn’t work.
- Liberals tend to favor more direct government price controls — but some providers are already seeking higher and higher prices from commercial insurance to make up for the lower payments they receive from government programs.