Service Price, Intensity Drove Increases in US Healthcare Spending From 1996-2013

Healthcare spending increased by $933.5 billion between 1996 and 2013, and service price and intensity accounted for more than half of it, according to a recent study.

The study, published in JAMA, analyzed the impact of population growth, population aging, disease prevalence or incidence, service utilizations, and service price and intensity on healthcare spending increases in the United States from 1996 to 2013.

“Various factors, including population aging, disease prevalence, cost of care, and technology, have been implicated as factors that can increase health spending,” wrote the authors. “Yet there is little consensus in the existing literature about which of these factors are most responsible for increase healthcare spending and even less information about how the effect of these factors varies by health condition or type of care.”

The authors of the study utilized data from the US Disease Expenditure 2013 project and the Global Burden of Disease 2015 study. The US Disease Expenditure 2013 project provided the authors with estimates of personal healthcare spending and service volume. The project synthesized information of healthcare spending from 183 sources, and produced modeled estimates of spending and volume disaggregated by 155 health conditions, 38 age and sex groups, and 6 types of care: ambulatory, inpatient, emergency department, dental, retail pharmaceutical, and nursing facility care.

The Global Burden of Disease study provided authors with population and epidemiologic data, including prevalence and incidence for each health condition. The study estimated prevalence, incidence, deaths, and other epidemiologic metrics by age and sex groups for 315 conditions for every 5 years from 1990 to 2015. More than 1000 data sources were used, including hospital data, claims data, and surveys.

The authors focused on 155 health conditions, 36 age and sex groups, and 6 types of care for the 18 years. From this, 5 variables were constructed: the total US population, the fraction of the population living in each age and sex group, the disease prevalence or incidence, service utilization, and service price and intensity.

Results showed that the largest increases were from service price and intensity (50%), but varied on type of care and health condition. Increase in population size accounted for a 23.1% increase in spending, while population aging was associated with 11.6%. Meanwhile, change in disease prevalence or incidence and service utilization were associated with a reduction in overall spending, but varied by condition category.

Across all health conditions, the greatest annualized growth rates were in emergency departments care (6.4%) and retail pharmaceutical spending (5.6%). The condition with the greatest absolute increase in spending was diabetes, which increased an annualized rate of 6.1%, and most of this increase was due to the increases in retail pharmaceutical spending.

The second largest increase in healthcare spending was from low back and neck pain, increasing at an annualized rate of 6.5%. Other notable increases were found in the treatment of hypertension, hyperlipidemia, and depressive disorders.

Out of the 6 types of care, ambulatory care had the biggest increase ($324.3 billion).

“Understanding these factors and their variability across health conditions and types of care can inform policy efforts to contain health spending,” concluded the authors.