Report Shows 2013 Health Spending Up

By Christine Kern, contributing writer

After year of “self-rationing,” individuals returning to healthcare in 2013

The IMS Institute for Healthcare Informatics, a Parsippany, NJ-based division of data analytics consultant IMS Health, has found patients are returning to the healthcare system after “several years of self-rationing.” This is evidenced by a 3.2 percent increase in 2013 prescription drug expenditures to $329.2 billion, according to the report. Physician office visits, hospital encounters, and filled prescriptions all increased in 2013.

The primary reason for last year's healthcare-spending increase was the low number of drug-patent terminations, which contributed to a more than $4 billion increase in spending on brand-name drugs, the report states. Overall, the lower number of patent terminations had a $10 billion impact on spending.

Nevertheless, overall health spending is still down. “Growth in medicine spending remains at historically low levels, despite a significant uptick last year, and continues to contribute to the bending of the healthcare cost curve,” Murray Aitken, executive director of the IMS Institute for Healthcare Informatics said in a news release.

The report’s key findings include the following:

• Increase in the utilization of healthcare services and medicines. The number of physician office visits, hospitalizations and prescriptions filled all increased in 2013.
• Spending on medicines. While drug spending levels have contributed to slower growth in healthcare costs since 2007, nominal spending rose sharply last year. The largest single driver of the 4.2 percentage point shift in spending growth in 2013 was the $10 billion lower impact of patent expiries.
• Transformations in disease treatment. Patients gained access to 36 New Molecular Entities (NMEs) in 2013, including ten new notable cancer treatments. Additionally, clusters of innovation are transforming patient care in hepatitis C, multiple sclerosis and diabetes, as well as stroke and acute coronary syndrome. Transformational treatments bring with them a shift in where costs are being incurred in the healthcare system – yielding the promise of fewer doctor office visits, less hospitalizations and reduced use of long-term care facilities.
• Patient payment for healthcare and medicines. Patients with insurance are incurring higher out-of-pocket costs for healthcare services despite lower co-pays for many prescriptions and additional discounts for preventive medicines.

The full version of the report, including a detailed description of the methodology, is available at here, and www.theimsinstitute.org. It can also be downloaded as an app via iTunes. The study was produced independently as a public service, without industry or government funding.