Medical cost growth slowing
But one segment is quickly expanding
The growth of total U.S. medical costs is slowing down, but one segment is expanding fast: prescription drug costs.
While U.S. healthcare spend trends are now just one or two percentage points above overall inflation, prescription drug costs are rising more quickly than hospitalization costs, according to a report by the S&P Dow Jones Indices.
S&P’s Healthcare Claims Indices show that overall healthcare costs rose 3.5 percent in the 12 months that ended February 2014 – slower than the nearly 5 percent increase seen a year earlier, before the full Affordable Care Act took effect.
Medical costs for inpatient and outpatient hospitalization and professional services rose 3.1 percent between February 2013 and February 2014. Notably, the report found, inpatient fee-for-service rose 2.6 percent, down from 4.3 percent in 2012-2013, and outpatient fee-for-service costs rose 4.9 percent, down from 6.3 percent.
However, during most of 2013 and the first two months of 2014, prescription drugs rose 3.5 percent – two percent points higher than the rate of growth in 2012-2013 – at the same time that individual health plans were starting to grow in membership.
“With the exception of prescription drugs, healthcare expenditures are growing more slowly than a year ago,” said David Blitzer, managing director and chairman of the S&P Dow Jones Indices, in a press release. S&P’s analysis was based on claims data from 33 large health insurance companies and 60 million Americans. “The greater growth in prescription drug costs reflects a combination of higher prices for both generic and branded pharmaceuticals and shifting market shares between generic and branded.”
This story is based on a report appearing on Healthcare Payer News.
