Ten Things to Know from HCCI's Health Care Cost and Utilization Report

by Clive Riddle, February 21, 2020

The Health Care Cost Institute has released its annual Health Care Cost and Utilization Report, now addressing 2018 data. The report "analyzes 2.5 billion medical claims to inform the public about trends affecting approximately 160 million U.S. individuals with employer-sponsored insurance." 

Here's ten takeaways from the 29-page report:

1. Health care spending grew 4.4% in 2018, slightly above growth in 2017 of 4.2%, and the third consecutive year of growth above 4.0%.
2. Total annual spending per person increased by 18.4%, from $4,978 to $5,892, between 2014 and 2018.
3. Between 2014 and 2018, average prices rose by 15%. Growth in average prices was 2.6% between 2017 and 2018, the slowest rate over the period.
4. Higher prices accounted for 74% of total spending increases above inflation over the 5-year period - an average of $453 per person.
5. Increased utilization of medical services accounted for 21% of spending growth after inflation - an average of $130 per person. Utilization of medical services rose by 3.1% between 2014 and 2018. Most of that increase, 1.8%, occurred between 2017 and 2018.
6. Professional Services averaged $1,985 per person, consuming 33.7% of spending. Outpatient Services averaged $1,662 per person, or 28.2% of spending. Inpatient Services averaged $1,128 per person, accounting for 19.1% of spending. Prescription Drugs averaged $1,118 per person, with 19.0% of spending.
7. Of the four major categories, outpatient visits and procedures saw the highest 2018 spending increase (5.5%), followed by prescription drugs (4.7%), professional services (4.5%) and inpatient services (2.2%)
8. Demographic shifts in the employer-insured population accounted for 4% of post-inflation spending growth over the 5-year period - an average of $27 per person.
9. People with job-based insurance saw their out-of-pocket costs rise by an average of 14.5%, or $114, between 2014 and 2018. The average out-of-pocket spending increased to $907 per person.
10. On average, Americans with employer-sponsored insurance spent $155 out-of-pocket on prescription drugs in 2018. Generic drugs accounted for 88% of all prescriptions. The average out-of-pocket price for generic drugs was less than 1/5 the average for brand-name drugs