LOCAL NEWS

Average health care spending has gone up nearly 20% in Utah, study says

Oct 21, 2024, 7:48 PM

FILE - Utah State Capitol. (KSL TV)...

FILE - Utah State Capitol. (KSL TV)

(KSL TV)

SALT LAKE CITY — Health care costs are rising in Utah, by as much as 20% — causing issues for employees and employers particularly at small businesses.

On Wednesday, about 75 employers and insurance brokers and legislators met at an event hosted by Regence to discuss health care spending and affordability and try to address the issues.

Jennifer Olsen, director of account management with Regence, said it hosted the event to bring awareness and make sure they are part of the solution.

“Everyone knows it’s a problem, but there’s not a lot of solutions yet,” she said.

Katie Martin, CEO of the Health Care Cost Institute, a nonprofit based in Washington, shared some Utah-specific statistics at the event. Specifically, she said the average health care spending per person in Utah is $5,000 each year — beyond insurance premiums.

This number grew 19% between 2017 and 2021, and she said that is being driven up primarily by the price of services rising, not demand or overall inflation.

On average, people spent $789 of that $5,000 out of their own pockets, and the rest was paid by insurance.

Martin said Utah has similar challenges as other states; prices are going up around the country. She suggested transparency around prices and collaboration — with hospitals, employers, insurers and patients — to address the issue.

“So that we can move past finger-pointing and really focus on what the data are telling us is driving spending. So we can work on finding solutions together,” she said.

She said the Health Care Cost Institute doesn’t make specific policy recommendations, but provides data to help others make decisions.

Looking at employer-provided insurance, Martin said, is important to looking at overall health care costs, but negotiations between health care providers and insurance companies make it hard.

She said a lab test in the hospital, around the U.S., is three times higher in an out-patient hospital setting instead of in an office, although the quality of the test is the same.

“It’s hard to imagine why the price would be so different,” she said.

She said this is just an example of a lot of unexplained price differences. In her presentation she showed costs for childbirth, an emergency room visit and an office visit being significantly different within the same areas in Utah at different facilities.

Martin said patients can ask questions about lower-cost alternatives, but shouldn’t be responsible for fixing the issue themselves.

“I think the average Utahn deserves to focus on their health, and to not worry as much how much it costs,” she said.

Bill Kramer, senior advisor for health policy at Purchaser Business Group in Health, said at the event that high health care costs are also hurting businesses. He said it slows business growth, crowds out wages and makes it harder for small companies particularly to keep employees.

“Employers are doing a lot as purchasers to try to hold down costs, but they can’t solve this alone. We need public policy solutions to make the market work better,” he said.

He works for a nonprofit organization that represents companies and public entities to negotiate health insurance. Kramer said he gave some suggestions at the event for lowering prices: strengthening oversight of mergers in the health care system, ending facility fees, prohibiting competitive practices — or giving incentives to employees for using certain companies.

He said establishing growth targets is important, mentioning the One Utah Health Collaborative, and said he encourages state leaders to move forward quickly with their goals and stay committed. He said other states have created similar initiatives that didn’t lead to action.

“I think it’s very encouraging that there’s a spirit of collaboration and that the … problem of high costs has been identified as a serious issue,” Kramer said.

He suggested employers in smaller companies struggling to provide health care could join a coalition to negotiate as a group and obtain better health insurance options for employees.

Because the health care cost crisis is ongoing, he said it does not get attention like a major disaster. Kramer said people either are numb to it, or feel helpless.

“There are people every day who can’t, literally can’t afford to get the care they need. Because of the high costs they are avoiding care, they are delaying care, they are incurring enormous amounts of medical debt that they probably can never pay off. And small businesses are suffering, they can’t even afford to offer health benefits at all to their employees,” he said.

Olsen said Regence addresses costs with its clients by promoting bio-similar medication, treatments that are less expensive than the specialty drugs, and directing patients to less expensive places for care — often independent clinics rather than hospitals.

She also said Regence helps its members keep costs low by emphasizing preventive care, including annual exams, screenings and vaccines, to avoid more expensive treatments later.

She said establishing a relationship with a primary care doctor can save costs for individuals, because the doctor can keep track of health history, find issues earlier and help lead to fewer gaps in preventative care.

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Average health care spending has gone up nearly 20% in Utah, study says