Skip to main content
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Current News
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • Digital Health
    • Transformation
    • ESG
    • People
    • Regional News
    • Digital Edition (Web Version)
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Midwest
    • Northeast
    • South
    • West
  • Blogs
    • AI
    • Deals
    • Layoff Tracker
    • HIMSS 2023
  • Opinion
    • Breaking Bias
    • Commentaries
    • Letters
    • From the Editor
  • Events & Awards
    • Awards
    • Conferences
    • Galas
    • Virtual Briefings
    • Webinars
    • Nominate/Eligibility
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Excellence in Governance
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top Innovators
    • Diversity in Healthcare
      • - Luminaries
      • - Top 25 Diversity Leaders
      • - Leaders to Watch
    • Women in Healthcare
      • - Luminaries
      • - Top 25 Women Leaders
      • - Women to Watch
    • Digital Health Transformation Summit
    • ESG: The Implementation Imperative Summit
    • Leadership Symposium
    • Social Determinants of Health Symposium
    • Women Leaders in Healthcare Conference
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Diversity Leaders Gala
    • Top 25 Women Leaders Gala
    • - Hospital of the Future
    • - Value Based Care
    • - Hospital at Home
    • - Workplace of the Future
    • - AI and Digital Health
    • - Future of Staffing
    • - Hospital of the Future (Fall)
  • Multimedia
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Sponsored Video Series - One on One
    • Sponsored Video Series - Checking In with Dan Peres
  • Data & Insights
    • Data & Insights Home
    • Hospital Financials
    • Staffing & Compensation
    • Quality & Safety
    • Mergers & Acquisitions
    • Data Archive
    • Resource Guide: By the Numbers
    • Surveys
    • Data Points
  • Newsletters
  • MORE+
    • Contact Us
    • Advertise
    • Media Kit
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Insurance
February 13, 2020 05:00 PM

Employer health plan spending jumped 4.4% in 2018

Harris Meyer
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Modern Healthcare Illustration / Getty Images

    Per capita health spending for the 160 million Americans in employer-sponsored health plans grew by 4.4% in 2018, the third consecutive year of increases above 4%, according to the latest annual spending report by the Health Care Cost Institute.

    Medical price growth slowed to 2.6% in 2018 but still accounted for most of the total spending increase. Higher prices accounted for nearly three-quarters of spending growth between 2014 and 2018, while increased utilization accounted for 21%.

    Utilization rose 1.8% in 2018, the largest increase in five years, with use of professional services showing the biggest hike—3.1%.

    Prescription drug prices jumped 3.6% in 2018, up from 1.4% in 2017.

    The average price of an inpatient admission rose 2%, down from nearly 4% a year between 2014 and 2017.

    Outpatient visits and procedures showed the sharpest price increase, rising 3.8% in 2018 but still below the 5.7% jump in 2017.

    Patient out-of-pocket spending rose from $874 in 2017 to $907 in 2018, an increase of 3.8%.

    Between 2014 and 2018, out-of-pocket spending rose 14.5%, less than the 18.4% total spending jump during that period. The increased out-of-pocket outlays were related to the growth in the number of employer health plan members enrolled in high-deductible health plans, which increased from 25.8% in 2014 to 33.5% in 2018.

    While many policymakers focus on increased spending in Medicare and Medicaid, data show the biggest per capita growth rates have been for private employer-sponsored plans.

    Niall Brennan, CEO of the Health Care Cost Institute, said no one should view growth rates over 4% a year as representing moderation in U.S. healthcare spending.

    "I don't think 18% over five years is moderate," he said. "The average American hasn't seen that big an increase in their take-home pay. This is the third consecutive year of growth in excess of 4%. You put those years together and you quickly end up with significant increases in cost."

    HCCI's report, based on claims data from four large insurers, closely corresponds to the CMS Office of the Actuary's recent report on national health expenditures. It found per capita spending on healthcare for all Americans, including those on Medicare and Medicaid, rose 4% in 2018, up from 3.5% the year before.

    The CMS reported medical price growth of 2.1% in 2018, up from 1.3% in 2017 — the fastest price growth since 2011.

    Per member spending growth in 2018 was 6.7% for employer plans, 4.2% for Medicare, and 2% for Medicaid, according to the CMS report.

    Still, some observers saw reason for hope in HCCI's report, pointing to the finding of a modest slowdown in healthcare prices..

    "I believe public awareness and the efforts of self-insured employers are putting a brake on the fast-increasing price trend," said Ge Bai, an associate professor of health policy at Johns Hopkins University who studies healthcare pricing. "The U.S. is the Mount Everest of pricing around the world. But what we're seeing is a tiny bit of hope."

    She pointed to narrow network plans and more aggressive payer negotiating tactics with providers, as well as political pressure, as factors contributing to a more moderate pricing trend. Others cite value-based payment programs.

    But many experts fear increasing market consolidation by hospitals and physicians, as well as continued price increases by drugmakers, may neuter such cost-control efforts by private payers.

    Bai noted that the HCCI's aggregate numbers mask the disproportionate cost impact on people in employer-sponsored plans who need a lot of medical care.

    HCCI found that 20.2% of enrollees in employer plans in 2018 had a diagnosis of at least one of five chronic conditions, such as hypertension; an additional 5.8% were diagnosed with two or more of these conditions.

    Those with one chronic condition had average per person spending of $9,187 in 2018, while those with two or more chronic diagnoses had average spending of $20,762. That compared with average per person spending of $3,755 for people with no chronic conditions.

    "The problem is for sick patients," Bai said. "It's the cost exposure over time."

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    UnitedHealthcare_i_i_i_i copy_i.png
    UnitedHealth to scrap some Medicare Advantage plans
    US sort term insurance
    States resist Biden proposal limiting short-term health insurance
    Most Popular
    1
    CMS tries luring providers to revamped Medicare ACOs
    2
    Oregon joins other states in setting ratios for nurse staffing
    3
    Blue Shield CA taps Amazon, Mark Cuban, CVS for new PBM model
    4
    A health innovation hub grows in Lake Nona Medical City
    5
    Hospital-at-home providers push for Medicaid coverage
    Sponsored Content
    Daily Finance Newsletter: Sign up to receive daily news and data that has a direct impact on the business and financing of healthcare.
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Help Center
    • Advertise with Us
    • Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Current News
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Digital Health
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • ESG
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Blogs
      • AI
      • Deals
      • Layoff Tracker
      • HIMSS 2023
    • Opinion
      • Breaking Bias
      • Commentaries
      • Letters
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Hospital at Home
        • - Workplace of the Future
        • - AI and Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Sponsored Video Series - One on One
      • Sponsored Video Series - Checking In with Dan Peres
    • Data & Insights
      • Data & Insights Home
      • Hospital Financials
      • Staffing & Compensation
      • Quality & Safety
      • Mergers & Acquisitions
      • Data Archive
      • Resource Guide: By the Numbers
      • Surveys
      • Data Points
    • Newsletters
    • MORE+
      • Contact Us
      • Advertise
      • Media Kit
      • Jobs
      • People on the Move
      • Reprints & Licensing