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Revealed: What's Really Driving Up Healthcare Costs

Margaret Dick Tocknell, for HealthLeaders Media, July 25, 2012

According to the report, healthcare spending on children increased despite a drop in the number of children covered and a drop in the use of expensive healthcare services, such as hospital stays and brand-name drugs.

So, if fewer children used fewer expensive services why has spending increased?

Health plans often cite utilization as a driver of increased healthcare costs, but in this case researchers discovered that regardless of the service category (inpatient or outpatient, professional or pharma) the price of the healthcare services themselves increased faster than either utilization or the intensity of those services.

The report points to a few trends that contribute to this outcome:

  • Inpatient and outpatient utilization is down, so fewer children are being admitted to hospitals or visiting EDs
  • Use of testing facilities has increased and services such as MRIs are more prevalent
  • At every physician visit more tests, consults, and procedures are performed

Over a three-year period between 2007 and 2010, the per capita expenditure for inpatient services increased by 13%, outpatient by 28%, professional services by 16% and prescription drugs by 19%.

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