Kamis, 07 Desember 2017

US Spending on Physician Services Strong but Slower in 2016

US Spending on Physician Services Strong but Slower in 2016


WASHINGTON, DC — Compared with the previous 2 years, spending on physicians, hospitals, and pharmaceuticals all slowed in 2016, as almost all Americans had some type of insurance coverage, according to a new report from federal health economists.

In 2016, 91.1% of Americans had health insurance, the highest in the nation’s history, said Micah Hartman, a statistician from the Centers for Medicare & Medicaid Services (CMS) at a December 6 briefing held here.

The latest analysis of 2016 spending finalizes estimates that were released by CMS economists in February.

Despite the high rate of insurance coverage, Americans’ out-of-pocket spending sharply rose, by 3.9%, in 2016. It was the fastest rate of increase in a decade, said the economists. Some of the out-of-pocket spending — which includes copayments, deductibles, coinsurance, and spending on noncovered items — was due to increased use of healthcare.

But, increasingly, individuals covered by employer-sponsored plans are being asked to pay more of the cost of their healthcare through rising deductibles and high-deductible health plans, according to the analysis.

Overall health spending in 2016 — $3.3 trillion — grew just 4.3%, in contrast to the sharp growth in 2014 (5.3%) and 2015 (5.8%) that came from the expansion of health insurance coverage under the Affordable Care Act (ACA), said Hartman and his CMS colleagues, who published their analysis online December 6 in Health Affairs.

The rate of growth in 2016 was in line with spending over the 2008 to 2013 period — when spending was historically lower because of a recession and the slow climb out of it.

Price increases — not use of healthcare — were big drivers of spending growth in those recession and postrecession years. The addition of millions of new enrollees in private insurance and Medicaid — and their need for hospital and physician services — drove increases in spending in 2014 and 2015.

In 2016, price increases were a small factor. The residual demand for healthcare goods and services from the newly insured or better-insured accounted for a slightly bigger percentage of the rise in per capita spending in 2016.

Physician Spending Strong but Slowing

Under the ACA, 8.7 million people gained private health insurance and 10.2 million were added to the Medicaid rolls from 2014 through 2015, which fueled a 4.6% and 5.9% growth in spending on physician and clinical services during those years.

In 2016, Americans were still seeking out physician care at a fairly high rate, leading to a 5.4% increase in spending on doctor and clinical services. The nation spent $665 billion on physician and clinical services last year, accounting for 20% of health spending. It is the second-largest category of spending, after hospitals.

Clinical services grew faster than physician services. Strong growth in spending on freestanding ambulatory and surgical centers — which are included in clinical services — are a primary driver, said the economists.

Both Medicare and Medicaid decelerated spending on physician services in 2016. For Medicaid, it was because of slower enrollment growth. Medicare’s deceleration was driven primarily by less spending on Medicare Advantage.

Private health insurers — which pay for 43% of physician and clinical services —increased that spending by 5.8% in 2016, compared with a 5.5% increase in 2015.

Hospital Use Declined

Spending on hospitals — accounting for a third of the nation’s health tab — also slowed in 2016. The $1.1 trillion spent on hospital care was a 4.7% increase from 2015, but insured individuals’ use and intensity of services did not grow as quickly as in 2015.

Hospital days and discharges both declined in 2016, in part because of a slowdown in enrollment in Medicaid and private insurance. Medicare spending on hospital care was stable, with increases basically remaining at the same level — between 2.8% and 3.3% — for the fourth consecutive year.

Out-of-pocket spending on hospital care accelerated in 2016 — rising 4.8% — in part because of the increase in enrollment in high-deductible health plans. Twenty-nine percent of workers with employer-sponsored coverage enrolled in a high-deductible plan in 2016, up from 20% in 2014.

Big Pause in Drug Spending

The increase in spending on retail prescription drugs was relatively tiny in 2016 — at just 1.3% — especially when compared with the boom years of 2014 (12.4%) and 2015 (8.9%). In those ACA expansion years, payers spent more on new medicines and price increases for existing brand-name pharmaceuticals. The biggest hit came from hepatitis C therapies.

But in 2016 — when the nation spent almost $329 billion on prescription drugs — fewer new drugs were brought to market (only 22, compared with 45 in 2015), and fewer people needed treatment with the costly hepatitis C medications. Net prices of hepatitis C therapies also declined, said the economists.

Aggregate spending growth on diabetes drugs slowed down somewhat in 2016, “even as diabetes remained one of the fastest-growing therapeutic segments,” according to the CMS economists.

Medicare benefited from lower spending on hepatitis C and diabetes therapies, seeing only a 2.8% increase in its drug tab in 2016, compared with a 9.3% increase in 2015. Anne Martin, one of the study authors and one of CMS economists at the briefing, said that the slowdown was driven in part “by a slowdown in prices for insulin used to treat diabetes.”

The authors have disclosed no relevant financial relationships. The opinions expressed in the analysis are the authors’ and not necessarily those of CMS.

Health Aff. Published online December  6, 2017. Abstract

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