Healthcare price trends return to normal after massive pandemic dip, report finds

The report notes that by 2021, brand-name prescription drugs will account for only 14% of usage, but more than 80% of spending.

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After a significant drop in health care costs early in the COVID pandemic, health care spending has rebounded in 2021, a new report finds. A study by the Health Care Cost Institute, looking at data prior to 2021, found that health care utilization declined to his lowest level in 12 years in 2020, but recovered by 2021. .

“By 2021, per capita health care costs will fully recover to nearly $6,500 (15% higher than in 2020),” the report said. “A 13% increase in usage from 2020 to 2021 contributed to this growth. Usage decreased by 7.5% in 2020. Average prices increased by 2% from 2020 to 2021. The slower growth rate than in previous years reflects that the overall mix of care in 2021 was cheaper than in 2020, when many low-cost preventive services were delayed.”

Including data from other years, the report found that prices increased by 14% from 2017 to 2021. During that time, healthcare utilization increased by just over 7%.

Spending increases, utilization flat until post-COVID recovery

According to the report, per capita spending will increase significantly from 2017 to 2021, increasing by $1,133 from $5,334 in 2017 to $6,467 in 2021, an increase of just over 21%.

The report notes that most of the increased spending is due to higher prices. Data showed that usage remained relatively flat from 2017 to 2019, but he dropped 7.5% in the first year of the pandemic. It will rise again in 2021, with usage increasing by 12.8% from 2020 to 2021.

From 2017 to 2020, prices increased by nearly 4% annually, but by 2021, they will grow by only 2%. This reflects a return to the use of affordable services such as preventive care.

Inflation and higher prices for goods and services were the main drivers of health care costs, the report said. Employer-sponsored program spending has actually declined in some areas, such as increased access to generic drugs. These factors, along with lower utilization during the pandemic, made 2020 the only year in which spending declined.

However, inflation and prices have resulted in positive cost trends in all years. “From 2017 to 2021, inflation accounted for $108 (7%) of the change in spending, while price increases accounted for $915 (56%) of the change in spending,” the report said.

Out-of-pocket expenses increased by 6.5% overall

For out-of-pocket (OOP) costs, 2020 was again an outlier, declining during the first few months of the pandemic before recovering in 2021. 2019,” the report said. “The cumulative increase in this period was $42 (5%). OOP spending growth was lower than total spending growth (9%) in 2017-19. Both decreased and then increased in 2021. The cumulative increase in OOP spending over five years was $50 (6.5%).”

There was a large difference between inpatient and outpatient costs. For the institutional component of inpatient care, OOP costs rose nearly 14% from 2017 to 2021. The largest increase in this area was in respiratory hospitalizations. For his OOP costs for hospitalized patients, there was no significant growth from 2017 to 2021. In fact, his average OOP payout in 2021 is $51, $1 less than his average payout of $53 in 2017. However, OOP payments for most outpatient procedures increased during that period. This suggests a much higher use of low-cost services, a situation that may change in the future.His OOP payments for professional services have also changed slightly over the five years.

READ MORE: Healthcare Pricing Transparency Rule Enacted

Drug prices rose 29% over the five-year period, according to the report. For the area of ​​OOP prescription drug costs, the data are somewhat more complex, as they do not include drugs administered in clinics or hospitals and do not reflect rebates or other discounts. With the exception of immunological drugs, the change in OOP payments was modest between 2017 and 2021, the report said.

The report found that by 2021, brand-name prescription drugs will account for only 14% of use and more than 80% of spending, while generic prescription drugs accounted for 86% of drug use in 2021, but 18% of spending. %.

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