Rising drug costs drove a $581 per capita increase in total medical spending for Minnesotans with private insurance last year — a trend that is putting a strain on household incomes and is likely to push the premiums are higher.
That 7% increase in 2022 follows a 12% increase in 2021, according to Thursday’s annual report by MN Community Measurement. Total costs include payments to insurers and out-of-pocket costs to patients.
Both figures show a bounce back from 2020, when spending has decreased. That year, the pandemic forced people to postpone surgeries and avoid routine care in doctor’s offices. But the numbers also show a worsening long-term trend, as spending increased more generally in ARC during the Pandemic than in prior years.
Annual spending per privately insured patient in Minnesota rose from $5,904 in 2014 to $8,832 last year, the report showed.
Some progress is inevitable, but the trajectory suggests that clinicians cannot prevent chronic diseases like diabetes and then manage them cost-effectively when they occur, said Julie Sonier, president of MN Community Measurement. is a nonprofit that seeks to improve health care through publishing. clinical data.
“There’s a ton of room for improvement in both areas,” he said. “We shouldn’t just sit back and say, ‘Well, you know, health care costs are going to grow 5 to 6 percent a year.’ I mean, they do, but that’s faster than historical economic growth.”
Pharmaceutical drug costs increased by 17% in 2022, when a new class of weight-loss drugs appeared.
Blue Cross and Blue Shield of Minnesota saw a 63% increase in spending on this class of drugs in the 12-month period ending in September. Hennepin Healthcare has removed coverage of drugs for weight loss purposes from its employee health plans for 2024 after spending millions more than expected for it in 2023.
The data show an increase in emergency room visits and outpatient surgeries, but a decrease in primary care visits and hospital admissions.
Hospitals report problems in releasing patients from inpatient beds, because there are no openings for them in nursing homes or rehab centers. Sonier said that the reduction in admissions is probably the result of the discharge problem and the lack of nurses and other caregivers that reduced the capacity of the hospital.
“What if someone goes to the emergency department and there’s no hospital bed where they can be admitted?” he said.
The report revealed how different clinics had vastly different prices for the same procedures. Private insurers paid some medical groups $348 for a common chest X-ray in 2022 while others paid $49.
It also shows differences in spending among clinics where patients receive primary care. Annual spending per patient topped $14,832 for those receiving primary care from the Mayo Clinic in Rochester, compared with $7,332 for Bloomington-based HealthPartners patients.
May has historically been the most expensive in this annual comparison, but its leaders say it is misleading because of the way the study assigns patients to clinics. Those assigned in May include people who receive primary care in Rochester while also receiving specialized treatments and tests for complex and rare diseases.
Mayo is not alone on the high-cost spectrum. More than 20 other medical groups had costs per patient listed in MN Community Measurement that were above the norm.
Sonier said providers seem to be ordering fewer unnecessary procedures than in years past, largely because of the difference in how much they charge for the essentials. The study holds primary care clinics responsible for the cost of care they provide to their patients, but also the cost of care provided by specialists.
“The idea is that primary care serves as a quarterback and coordinates people’s care,” he said.
Effective diabetes management, for example, can delay the need for expensive insulin injections or disabling conditions that require surgeries or expensive therapies.