Per capita spending on employer-sponsored insurance for people under 65 grew at historically slow rates from 2007 to 2011, averaging 4.9 percent annually, according to a Health Affairs study.
Still, spending on employer-sponsored insurance grew 1.6 percentage points faster than per capita national health expenditures and 3.9 percentage points faster than the GDP, according to the study. Approximately 156 million Americans younger than 65 are enrolled in employer-sponsored health plans.
From 2007 to 2011, prescription spending grew 3.3 percent annually on average, medical spending grew at a rate of 5.3 percent and medical out-of-pocket spending went up by about 8 percent per year, researchers from the Health Care Cost Institute found. Additionally, use of medical service and prescription drugs slowed and medical price growth sped up.
The main factor driving employer-sponsored health plan spending growth is rising prices, not utilization, says Carolina-Nicole Herrera, one of the study's authors and director of research at the Health Care Cost Institute. Outside of mental health and long-term care, hospital admissions are declining, and utilization of outpatient services shows slower growth as well, she says.
According to the study, utilization of major medical services could have slowed down for various reasons, such as the rising number of people enrolled in consumer-driven health plans, including high-deductible health plans, which shift more decision-making and financial responsibility onto consumers.
Additionally, slowing utilization could reflect changes in the insured population cause by the recent recession, leading to year-by-year differences in the average health status of people with employer-sponsored insurance.
Medical and prescription price trends also diverged during the study period, with price per medical service increasing 3.5 percent per year on average, outpacing utilization's 1.7 percent average annual growth rate.
Meanwhile, growth in prescription price per filled day slowed down, possibly driven by increased use of lower-cost generic drugs, according to the study. Per capita prescription expenditures went from a 5.5 percent growth rate in 2008 to 1 percent in 2011.
Ms. Herrera says price growth rates may vary between hospital markets, and more detailed data is needed to evaluate the cause of pricing trends in different regions. "Prices are going up, but hospitals aren't homogenous institutions," she says. "They're in different markets serving different populations."
The study's findings raise further questions about the reasons behind the slowdown in spending on employer-sponsored insurance and the medical and prescription price divergence that should be addressed through more research, according to the researchers.
And with major provisions of the Patient Protection and Affordable Care Act kicking in next year, Ms. Herrera says future employer-sponsored insurance spending levels remain "an open question." It's difficult to say how the new insurers, health plans and benefit designs entering the arena will affect employers.
"It'll be really interesting to see, with the advent of the exchanges: Do small and large businesses stay with their current insurers, or do they gravitate to new ones?" she says.
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