Data shows healthcare costs in WA increased by 13% between 2016 and 2019

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A new analysis from the Office of the Insurance Commissioner (OIC) shows that healthcare costs for the commercial health insurance market increased by 13% between 2016 and 2019, while the consumer price index increased by 7%.

“For years we have seen the cost of health care rise, especially with advances in technology and prescription drugs,” Insurance Commissioner Mike Kreidler said. “These increases have had an impact on how much people pay for their health insurance. We need to understand what is driving the costs if we are to fix the problem and help reduce health insurance premiums. This report helps us take a closer look at what is behind increases in health care costs and understand whether it is the use of health care services or their price that contributes more to cost growth.

Kreidler’s analysis examined the data using claims from the Washington database.

The report was produced by Onpoint Health Data and used data from Washington All Payer Claims Database (www.hca.wa.gov). It examines claims between 2016 and 2019 from state-regulated health insurance plans for people up to age 64 and identifies the extent to which cost increases were due to increased use of services or prices. It revealed that the following areas of care were the most significant cost drivers:

  • Pharmacy
  • Acute hospital care
  • Ambulatory emergency care
  • Non-emergency outpatient care
  • Ambulance

Among the main results:

Total medical and pharmaceutical expenses per member per month were $373 in 2016 and increased to $422 in 2019. In this 13% increase, medical expenses increased by 11.5% while drug costs on prescription jumped 19.2%.

According to his analysis, the average price per service for pharmacy and short-term hospitalization services exceeded inflation between 2016 and 2019.

It also showed that a 19.2% increase in pharmacy spending was due to a 15% increase in the average cost of filling a prescription. At the same time, the number of prescriptions filled increased by 4%.

Ambulatory services, including emergency and non-emergency services, increased by 17% over the same period.

The analysis indicated that these numbers provide some clarity on how and why health care costs are rising in Washington state.

“Washington State has been tremendously successful in improving access to health insurance for people who need coverage, and that’s something I’m very proud of,” Kreidler said. “But now we have to get serious about affordability. Understanding what lies behind often crippling costs is the first step towards a solution.

Kreideler’s office says it will release additional data that will take a deeper look at prescription drugs, mental health, hospitals and ambulances over the coming months.




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