Report: For privately insured Americans, doctors, surgery, drugs cost more in 2010

Posted: May 23, 2012

Higher prices for visits to doctors, surgery, and drugs were the main cause of higher health-care costs for privately insured Americans in 2010, when overall utilization of health-care services was down, a report by the Health Care Cost Institute in Washington, said Monday.

The report, using data provided by Aetna, Humana, and United Healthcare, analyzed three billion claims for 33 million individuals covered by employer-based health insurance from 2007 through 2010.

“For the first time, we have comprehensive data on the privately insured. This lets us develop a clearer picture of what is truly driving health-care spending in the United States,” said Martin Gaynor, chairman of the institute’s governing board and professor of economics and health policy at Carnegie Mellon University in Pittsburgh.

The report found that per-capita spending for individuals under age 65 increased 3.3 percent in 2010, down from 6 percent in 2008 and 5.8 percent in 2009. However, the 2010 increase was still about twice as much as overall inflation, Gaynor said. By age group, the biggest percentage increase in 2010 per-capita expenditures — 4.5 percent — was for children 18 and under.

The biggest price increases from 2009 to 2010 were for emergency-room visits (11 percent), outpatient surgery (8.9 percent), and treatments for mental health and substance abuse (8.6 percent). But even the price of a visit to a primary-care physician was up 5.3 percent, to $86.

“A provider increasing their price is not resulting in any patient attrition” because too few consumers know the prices for their health care, said Douglas Ghertner, president of Change Healthcare Corp., a Brentwood, Tenn., company that helps employers and health plans increase price transparency.

Separately, the 2012 Milliman Medical Index, released last week, showed that the total cost of health care for a family of four covered by a preferred-provider plan climbed 6.9 percent, to $20,728.

The annual projected increase was less than 7 percent for the first time in the 12-year history of the index, according to Milliman, a Seattle actuarial and consulting firm.

In Philadelphia, the average cost, $22,054, is 6.4 percent higher than the national average, Milliman said. Philadelphia had the fifth-highest cost of 14 major cities studied.

The decline in the annual percentage increase is good news for employers and families, but there is little long-term relief. Nationwide, costs are up 33 percent since 2008 and up 35 percent over the same period in Philadelphia.

Contact Harold Brubaker at 215-854-4651 or

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