Healthcare Spending Increases…Surprised?

Last week, Bloomberg News reported that:
“Health Spending Gains as Obamacare Patients Use the Plans”

Ok, is this really a news flash?

Well, no, but not for the reasons you may have thought.

We bet you thought spending rose because more people bought the insurance.

Well, yes…and no.

Apparently, those that bought insurance through the health insurance exchanges also decided to USE their newly acquired insurance.

Any guesses on what they spent their deductible dollars on?

Well, according to the article:

  1. prescription drugs, and
  2. elective surgeries

Consumer purchases of health services surged 9.9 percent at an annualized rate in the first quarter from the prior three months, the highest rate of growth since 1980, according to the Bureau of Economic Analysis. Health spending contributed 1.1 percentage points to total growth in gross domestic product, the most since quarterly records began in 1947.

The growth is likely the result of increased utilization under the Patient Protection and Affordable Care Act because prices mostly have been little changed. Health plans, pharmacies and hospitals say they are seeing the first signs of newly insured patients seeking medical care, including high-cost drugs and surgeries.

Ceci Connolly, managing director of PricewaterhouseCoopers Health Research Institute in Washington, [agreed:] “This is definitely an increase in utilization, it appears, more than pricing.”

Hospital operator HCA Holdings Inc. (HCA) said yesterday in states that have expanded Medicaid the company’s admissions under the program rose 22 percent in the first quarter from a year earlier.

Obamacare patients have filled four times as many prescriptions for costly drugs to treat HIV as people in commercial health plans, said Express Scripts Holding Co. (ESRX), the nation’s largest administrator of prescriptions.

“We do believe that’s because you have individuals who were going untreated before or didn’t have access to coverage because of pre-existing conditions,” said Julie Huppert, vice president for health reform at the company, in a phone interview. “There was targeted outreach to that community. We’re not surprised to see them utilize the benefit early.”

Are you newly insured?

What did you spend your healthcare dollars on at the beginning of this year?

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