Employee Healthcare Costs Predicted To Rise Faster Than Employers’

ANN ARBOR — Employers are passing more of the increases in health care costs on to employees, according to a new study from Ann Arbor-based Truven Health Analytics.

The semi-annual U.S. Benchmarks and Trends report from Truven predicts that employee out-of-pocket healthcare spending is expected to grow 12 percent in both 2014 and 2015, while spending increases for employers will rise far more modestly.

The actual growth of employee out-of-pocket healthcare spending, the report says, was 6 percent.

Truven Health analysts found more modest spending increases for commercial payers: an increase of more than 3 percent in allowed medical and pharmacy costs in 2013, and expected increases of approximately 5 percent in both 2014 and 2015.

This semi-annual study analyzes the claims experience of more than 330 employers representing 15.1 million insured lives across a full spectrum of industry types, health plans, and pharmacy benefit managers. The de-identified claims data is extracted from Truven’s Health MarketScan Research databases.

The researchers also found that the total medical and pharmacy costs for active employees and their dependents increased from $4,420 to $4,569 per member per year from 2012 to 2013. These increases were felt across the board; there was a 3.8 percent increase in outpatient medical costs and a 3.2 percent increase in pharmacy costs. Plan sponsors have been sharing these increased costs with their members, leading to member out-of-pocket expenses that are nearly 6 percent higher than 2012.

Report findings include:

* Outpatient Spending on the Rise: Total allowed outpatient spending rose as much as 3.8 percent in 2013, heavily driven by emergency department spending. In 2012, there were double-digit increases in total emergency costs, and those costs continued to grow up to 8.5 percent between 2012 and 2013. In addition, total outpatient surgery costs increased as much as 7.7 percent in 2013. Some of the increases in outpatient spending can be explained by the shift from inpatient to outpatient settings. The continued increase in outpatient utilization is expected and, in many cases, may help to reduce overall expenses.
* Prescription Drug Spending Increases: Pharmacy claims expenses
increased 3.2 percent from 2012 to 2013, spurred by specialty pharmacy cost increases of 12.2 percent, or $236 per member per year. Specialty pharmacy now accounts for as much as 26.3 percent of total pharmacy spending across both medical and prescription drug segments. Specialty drugs like Humira and Enbrel for rheumatoid arthritis, Copaxone for multiple sclerosis, and Revlimid and Gleevec for various cancers were among the top 20 drugs based on total spending in 2013.
* A Few Chronic Conditions Account For A Great Deal of Cost: Fifteen common chronic or cancer conditions, including asthma, lower back disorders, substance abuse, osteoarthritis, breast cancer, depression, and coronary artery disease, account for nearly a quarter of all medical spend in 2013.

Download the employer report here  and health plan report here. 

More at www.truvenhealth.com.

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