Health Care Service Use Down, but Spending Continues to Rise

Spending on brand prescription drugs increased despite a 16% decrease in the use of these drugs.

Health care spending for the privately insured increased 3.4% in 2014 despite a decline in the use of health care services, according to a report from the Health Care Cost Institute (HCCI).

The 2014 Health Care Cost and Utilization Report analyzes health care spending trends for Americans young than the age of 65 years and covered by employer-sponsored insurance from 2010 to 2014. Over the 5-year period per capita spending growth grew between 3% and 4% each year.

The report found that spending on brand prescription drugs increased by $45 per capita in 2014 despite a 16% decrease in the use of these drugs. The report attributes the increase in spending to the use of the hepatitis C drugs Olysio, Sovaldi, and Havoni.

“It’s striking to see the impact high priced drugs can have on health care spending, particularly in the case of three hepatitis C drugs, where use is relatively low,” HCCI Senior Researcher Amanda Frost, said in a statement. “With more high-priced drugs set to enter the market, higher spending on brand prescriptions is a potential trend to watch.”

In 2014, the largest decline in health care service utilization was for acute admissions (-2.7%) and the largest average price increase was for acute inpatient admissions, which increased $831 per admission (4.6%).

HCCI found that women spend more out of pocket each year, with the difference between what men and women spend reaching $237 in 2014, and the gap between the young and the old increased.

In 2010, the difference between the oldest and youngest age groups was $6281, which increased to $6806 in 2014.

“We’re pleased to release our fifth annual health care spending report,” said HCCI Executive Director David Newman. “With the implementation of the Affordable Care Act, HCCI looks forward over the coming years to continue its analysis of health care trends, tracking any changes brought by the ACA in order to aid and improve the US health care system.”