UnitedHealth study: Hospital inpatient spending from commercial plans tops $200B in 2018

hospital money
Insurance giant UnitedHealth tried to peg the problem of high health costs onto hospitals in a new study. (Getty/PraewBlackWhile)

The annual cost of hospital inpatient spending from commercially insured individuals was more than $200 billion last year, according to an insurer study attacking the hospital industry.

The study released Monday from UnitedHealth Group comes as the insurance industry has come under heavy criticism from politicians for driving up healthcare costs. The study calls for hospitals to lower price increases by two percentage points a year to rein in costs.

UnitedHealth, the country’s largest insurer, said that from 2013 to 2017 inpatient hospital prices grew 19% while utilization overall declined by 5%. Physician prices within a hospital grew only 10% over that same time period, according to the study that analyzed commercial insurance claims.

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The insurer said that hospitals need to keep price increases in line with physician offices to help control spending.

“If hospital price increases for all inpatient services dropped by just two percentage points per year between 2020 and 2029, hospital inpatient spending for privately insured individuals would be reduced by over $50 billion in 2029 alone,” the analysis said.

The analysis also looked at the price spikes for certain hospital procedures. For example, the price for an appendectomy increased annually by 7.5% from 2013 to 2017, while the physician price remained flat. The cost for childbirth increased annually by 6% in hospitals over that four-year period and only 2% for physicians.

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But the report doesn’t detail how exactly UnitedHealth can contribute to lowering the percentage of hospital health spending.

“This does raise the head-scratching question: Is UnitedHealth suggesting it's powerless to address this?” tweeted Larry Levitt, senior vice president of the Kaiser Family Foundation.

The hospital industry charged that UnitedHealth cherry picked its data and omits key facts. 

"The data analyzed are from 2013 through 2017," according to a blog post from the American Hospital Association. "However, more recent data show that hospital price growth has been very slow in recent years, particularly compared to insurance prices."

UnitedHealth also omitted factors affecting growth that aren't controlled by hospitals such as prescription drug prices. 

Insurers have been heavily criticized by 2020 Democratic presidential candidates during the recent string of debates. Some candidates such as progressive stalwart Sen. Bernie Sanders, I-Vermont, have called on abolishing private insurance for a single-payer “Medicare-for-All” system.

However, hospital prices have largely escaped attention from Democratic candidates.

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