Healthcare Spending Rises, as Persons Who Gained Insurance Seek Hospital Care

The dip in the rate of healthcare spending brought on by the 2008 recession is over, and instead it appears hospitals are seeing patients with years of pent-up health problems.

US Census Bureau data released this week show spending in the healthcare sector up 7.2% percent for the first quarter of 2015 over the same period a year ago. Hospital spending grew more rapidly than the sector overall, up 9.2%, with similar jumps in diagnostics (9.1%), psychiatric and substance abuse services (7.9%), and medical and surgical centers (9.3%).

Healthcare spending outpaced overall spending, which rose 3% from the same period in 2014, according to the data.

Drew Altman, president and CEO of the Kaiser Family Foundation (KFF), quickly attributed the spike to the fact that people newly covered by the Affordable Care Act (ACA) were using medical services, perhaps for the first time. But some of the increase could also be due to the improving economy, as hospital executives had reported declines in certain elective procedures when the recession hit. The rise in spending in the surgical area could be sign that people have stopped putting off such care.

Larry Levitt, a policy expert also with the KFF, told Modern Healthcare that the patients hospitals are seeing these days have more complex conditions. And prices are going up, too, from a variety of factors.

Across medicine, small practices trying to meet electronic health record (EHR) and metric reporting requirements are finding it difficult to stay independent from large health systems. This is especially true in cancer care, where practices have the added burden of dealing with the complex billing systems for expensive therapies. Critics of consolidation say it will drive up the cost of health care.

The Census numbers bear out requests from insurers in several states for 2016 rate increases for health plans sold on the exchanges. In recent weeks, some experts have said that plans that sought to grab market share may have underprices, or underestimated, the cost of caring for patients who had gone stretches without coverage. As those consumers came into the system and took care of medical issues than had gone unaddressed, healthcare spending will rise overall, at least in the short term.

Rising costs of pharmaceuticals have also been cited as factor in healthcare spending, but those figures were not discussed in the Census data.

Source:

Quarterly Services Report: https://www.census.gov/services/qss/qss-current.pdf