Health care costs in N.J. rising even faster than nationwide numbers

By Anjalee Khemlani
New Jersey | Oct 11, 2018 at 6:00 am

The New Jersey Health Care Quality Institute released a new study of health care costs — and their unyielding double-digit increase year-over-year — in a new report in collaboration with the national Health Care Cost Institute.

The study covers data from 2012 to 2016 and includes employee-sponsored insurance from UnitedHealth Group, Aetna, Humana and Kaiser Permanente.

The results are unsurprising.

The study shows health care spending in New Jersey rose faster than the national average, at 18 percent, compared with 15 percent nationally, according to HCQI CEO and President Linda Schwimmer.

This is in part due to increased costs of services — even as utilization overall of the health care system went down, which is ideally where health care is headed.

“In New Jersey, inpatient utilization decreased to a greater extent (19 percent) than the national average (12.9 percent), which is good news — except that inpatient spending went up 12 percent overall because inpatient prices went up 38 percent,” Schwimmer said in a statement.

She discussed some of the findings at the annual State of the State of Healthcare event hosted by the New Jersey Healthcare Underwriters Association on Oct. 5.

Schwimmer then commented on the unusual seesaw effect of cost and utilization.

“Where else in America can you lose market share and increase revenue but in the health care system?” she said.

Drug spending increased about the same in the state as it did nationally, by about 27 percent, and the highest jumps were, surprisingly, not all in life-saving sectors.

Drugs for skin conditions rose 93 percent, hormone drugs rose 67 percent and cancer drugs rose by 64 percent.

But the HCCI study bore down on several aspects of spending and found the following:

  • Spending per person for surgery in New Jersey jumped 20 percent; labor and delivery was up 17 percent; and newborn care soared 49 percent.
  • National outpatient spending rose 17 percent, while outpatient spending in New Jersey jumped 19 percent. In New Jersey, lab and pathology increased 31 percent (compared with 14 percent nationally); emergency care rose 32 percent; radiology 18 percent; and outpatient surgery 7 percent.

“The data shows the main driver in rising employer sponsored health care spending has been the jump in prices. We now spend 17.9 percent of our gross domestic product on health care — twice what we spent in 1980. The National Health Expenditure Projections predict the percentage will be 19.7 by 2026,” Schwimmer said.

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Anjalee Khemlani | akhemlani@roi-nj.com | AnjKhem