A recent American Medical News article suggests that a recovering economy and greater use of preventive care may be contributing to increases in spending on physicians. The article highlights costs related to “physician and other professional services” for the typical American family of four as reported in the 2013 Milliman Medical Index (MMI). Study co-author Lorraine Mayne provides perspective regarding those rising costs.
Here is an excerpt from the article:
In a Milliman Medical Index [sic] released in May, physician and other professional services for an average family of four that receives health care benefits through an employer-sponsored preferred provider organization plan cost about $7,000 in 2013, a 5.2% increase over 2012. That’s 32% of the total health cost of $22,030 — $12,886 through employer subsidies, and $9,144 from employee payroll deductions and out-of-pocket costs.
Overall, health spending went up 6.2%, the third consecutive year the growth rate decreased after reaching a peak of 7.8% in 2010. Outpatient procedure spending in 2013 has grown the fastest, at 9.2%, followed by pharmacy-related costs at 7.9%, and inpatient care, at 5%. Milliman said a shift in many procedures from inpatient to outpatient care was reflected in their growth rates. Spending on physicians was counted as professional services no matter whether the care was outpatient or inpatient.
In 2013, about half of the 5.2% cost increase to PPO plans was due to more patients going to physicians for more services, said Lorraine Mayne, principal and consulting actuary for Milliman, a health consulting company. She said part of the annual increase had been flat for the previous two years.
Mayne said it’s likely that some families had postponed health care to avoid paying for their out-of-pocket share. But an improved economy and more people being employed and insured probably have contributed to the rise in physician utilization.
Figure 3 below illustrates healthcare spending in 2013 under five separate components.
Figure 5 below shows the annual rate of increase in costs under the five components.
To read more press coverage of the 2013 MMI, visit Storify.com/MillimanHealth.