UnitedHealth Brief: Hospitals Will Cost Payers $250 Billion Over the Next Decade

Healthcare is expected to cost the country $6 trillion by 2027, an increase from $3.5 trillion in 2017, according to the Centers for Medicare & Medicaid Services – but it can be difficult to pinpoint the source of the swelling.

Hospitals complain about low reimbursement rates from insurance companies while insurance companies point to rising hospital costs. Consumer behavior and social determinants of health are huge factors that are even more difficult to address. The most troubling piece of the puzzle is that despite the cost increases, overall quality in the United States (and Texas in particular) have not risen with cost.

As healthcare spending nears one-fifth of our GDP, one move the federal government has made has been to make hospitals post the prices they charge for their procedures and treatment in an effort to improve shopability for the consumer. Unfortunately, many of these lists are impossible for a layperson to read, and the price is somewhat useless because of insurance companies’ negotiated rates.

Within that context, UnitedHealth Group has released a research brief that analyzes claims from UnitedHealth plan members who are privately insured, showing that hospital increases are outpacing physician price bumps.

The brief says that between 2013 and 2017, there was a 19 percent increase for hospital prices, but just a 10 percent increase for physicians. Inpatient services delivered by hospitals and physicians over that period actually decreased by 5 percent. The brief calculates that if inpatient services were decreased by just two percent from the current rate, privately insured patients would save $250 billion over the next 10 years.

The brief highlights a few areas where hospital prices outpaced physician charges for the same time period. Inpatient hypertension treatment went up 6.5 percent for hospital prices and only one percent for physician prices, while coronary bypass surgery saw 6 percent increases for hospitals and 1.5 percent for physicians. For Appendectomy, it was 7.5 percent for the hospital and no increase on the physician side.

Read the entire brief here.