Higher healthcare spending due to price increases rather than use of services

Between 2009 – 2010, higher healthcare spending was mainly due to price increases, rather than changes in the use of health care services, according to a report by the Health Care Cost Institute.

The report examined data from three national insurers, Aetna, Humana and United Healthcare, which cover about 20 percent of the population with employer-sponsored group insurance.

Key findings include:

• Per capita health spending among people under 65 is growing moderately, up 3.3 percent from the previous year.
• Prices for hospital admissions, outpatient care and prescription drugs all grew at a much faster rate than general inflation in 2010.
• Utilization of services was generally down in 2010 compared to 2009, with the largest declines in outpatient visits and inpatient admissions.
• Health expenditures increased the most for those 18 and younger, with an estimated growth of 4.5 percent, compared to 3.1 percent growth for those 55 to 64.

(Sources: The Commonwealth Fund, http://www.commonwealthfund.org, May 21, 2012; Health Care Cost Institute Report, http://www.healthcostinstitute.org, May 2012)