Employee spending is more on medical services than on drugs

Today patients benefit from value based care solutions but, ironically drug prices have risen phenomenally. Spending on medical services for people enrolled in employer-sponsored health plans increased 44% from 2007 to 2016. This was revealed in a study conducted by researchers from the Health Care Cost Institute (HCCI).


Out-of-pocket spending among people availing to employer-sponsored coverage increased 43%. The distribution of overall spending by service didn’t change considerably over time. But, spending on outpatient services outpaced all others, which grew at an average of 5.7% per year.

The distribution of spending on out-of-pocket costs changed. As a matter of fact, out-of-pocket spending on prescription drugs decreased from 32% in 2007 to 18% in 2016.

Savings from lower out-of-pocket spending on drugs were counterbalanced by increase in spending on the medical service categories as per the study. The out-of-pocket spending has moved away from prescriptions to medical services.

These findings were calculated using HCCI’s national sample of claims data. Per capita spending rose from $3,752 in 2007 to $5,394 in 2016, though not consistently. Fast growth was witnessed between 2007 and 2009, which slowed between 2010 and 2014. But, it again picked up pace in 2015 and 2016.