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Analysis

1.3% of Enrollees Account for Nearly 20% of Spending in Larger Employer Health Plans

By John Commins  
   August 06, 2019

Enrollees with 'persistently high spending' over three years averaged almost $88,000 in health spending in 2017.

Just 1.3% of people enrolled in large employer health plans for more than three years accounted for 19.5% of overall healthcare spending in 2017, according to a study by the Henry J. Kaiser Family Foundation.

These "people with persistently high spending" were in the top 5% of spending each year from 2015 to 2017, with an average healthcare spend of $87,870 in 2017, KFF found.

By comparison, the average per person spending was $5,870 for all large group enrollees during that three-year span.

"Spending on retail prescription drugs accounted for almost 40% of spending for those with persistently high spending in 2017, more than twice the percentage for enrollees overall," the study said.

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People with persistently high spending averaged more than $34,100 in spending on retail prescription drugs in 2017, compared to $1,290 for enrollees overall, the KFF study showed.

"This underscores the importance of prescription drugs in treating people with chronic illnesses as well as the fact that some drugs have very high prices," KFF said.

The analysis linked persistently high spending with diagnoses for chronic health conditions such as HIV, multiple sclerosis, cystic fibrosis, rheumatoid arthritis, diabetes with complications, and a number of cancers.

"While not everyone with these conditions has persistently high spending, there are large shares of people with persistently high spending who have these diseases," KFF said.

The study found that many enrollees move in and out of the "persistently high spending" category as they suffer serious illness and recover. However, some of the high-spending enrollees remain in the category for years, and KFF recommended that these enrollees become the focus of lowering costs while improving quality.  

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.


KEY TAKEAWAYS

Prescription drugs accounted for almost 40% of costs for 'people with persistently high spending.'

The analysis linked persistently high spending with diagnoses for chronic health conditions such as HIV, MS, cystic fibrosis, rheumatoid arthritis, diabetes with complications, and cancer.

People with persistently high spending averaged more than $34,100 in spending on retail prescription drugs in 2017, compared to $1,290 for enrollees overall.


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