Infographic

U.S. Spending on Retail Prescription Drugs Grows Moderately in 2018

December 20, 2019

Total U.S. health care spending increased 4.6% in 2018 to reach $3.6 trillion, according to CMS’s Office of the Actuary. Spending on physician and clinical services went up 4.1% to $725.6 billion, slowing from the 4.7% growth seen in 2017. Meanwhile, spending on retail prescription drugs grew 2.5% in 2018 to total $335.0 billion. In comparison, retail prescription drug spending grew 1.4% in 2017.

by Jinghong Chen

Total U.S. health care spending increased 4.6% in 2018 to reach $3.6 trillion, according to CMS’s Office of the Actuary. Spending on physician and clinical services went up 4.1% to $725.6 billion, slowing from the 4.7% growth seen in 2017. Meanwhile, spending on retail prescription drugs grew 2.5% in 2018 to total $335.0 billion. In comparison, retail prescription drug spending grew 1.4% in 2017. Increased spending on new oncology and autoimmune drugs was partially offset by a decline in drug price growth and increased uptake of generic drugs, the report said. Expenditures on Medicare prescription drugs saw the greatest growth, increasing 5.9% to $107.2 billion in 2018.

NOTE: “Other Health Insurance Programs” may include Children’s Health Insurance Program (Titles XIX and XXI), Department of Defense and Department of Veterans Affairs. Dollar amounts shown are in current dollars. Percent changes are calculated from unrounded data.

SOURCE: Centers for Medicare & Medicaid Services, Office of the Actuary, National Health Statistics Group. Visit https://bit.ly/2RKA4Lh.

Employees Spend an Average 11% of Income on Premiums, Deductibles

December 13, 2019

Average annual growth in employees’ health insurance premium contributions and deductibles increased faster than U.S. median income between 2008 and 2018, according to a recent report from The Commonwealth Fund. On average, employees spent $1,427 on their share of single-plan premiums in 2018, ranging from $755 in Hawaii to $1,903 in Massachusetts. The combined cost of premiums and deductibles accounted for 10% or more of median income in 42 states in 2018, up from seven states in 2008.

by Jinghong Chen

Average annual growth in employees’ health insurance premium contributions and deductibles increased faster than U.S. median income between 2008 and 2018, according to a recent report from The Commonwealth Fund. On average, employees spent $1,427 on their share of single-plan premiums in 2018, ranging from $755 in Hawaii to $1,903 in Massachusetts. The combined cost of premiums and deductibles accounted for 10% or more of median income in 42 states in 2018, up from seven states in 2008.

NOTES: Employee premium contributions are for insurance policies offered by private-sector employers in the U.S. Single and family premium contributions and deductibles are weighted for the distribution of single-person and family households in the state.

SOURCE: Sara R. Collins, David C. Radley, and Jesse Baumgartner, “Trends in Employer Health Care Coverage, 2008–2018: Higher Costs for Workers and Their Families,” The Commonwealth Fund, Nov. 2019. Visit https://bit.ly/2sDu5gK.

National Health Spending Reaches $3.88 Trillion in September

December 6, 2019

National health spending rose 4.9% between September 2018 and September 2019, according to a report by the nonprofit research and consulting organization Altarum. Spending on hospital care represented 33% of total health expenditures in September 2019, followed by spending on physician and clinical services. All major health spending categories saw increases year over year, with expenditures on prescription drugs growing the fastest, at 8.0%. Growth in home health care spending was only 1.9% over the same period of time.

by Jinghong Chen

National health spending rose 4.9% between September 2018 and September 2019, according to a report by the nonprofit research and consulting organization Altarum. Spending on hospital care represented 33% of total health expenditures in September 2019, followed by spending on physician and clinical services. All major health spending categories saw increases year over year, with expenditures on prescription drugs growing the fastest, at 8.0%. Growth in home health care spending was only 1.9% over the same period of time.

SOURCE: “Insights from Monthly National Health Spending Data through September 2019,” Altarum Center for Value in Health Care.

Generic Drug Approvals Hit Another Record in Fiscal Year 2019

November 22, 2019

In fiscal year 2019, the FDA approved 1,171 generic drugs — 935 of which were full approvals and 236 of which were tentative approvals — representing a 20.6% increase from last year’s all-time record of 971. The agency also OK’d 125 applications for first generics of medicines that had no generic competition, including Narcan, an emergency opioid overdose medication. Meanwhile, a recent study in JAMA found that while the overall number of generic approvals increased from July 2016 to December 2018, about 20% were generics facing limited competition with two or fewer generic competitors, and only 19% were complex generic drugs.

by Jinghong Chen

In fiscal year 2019, the FDA approved 1,171 generic drugs — 935 of which were full approvals and 236 of which were tentative approvals — representing a 20.6% increase from last year’s all-time record of 971. The agency also OK’d 125 applications for first generics of medicines that had no generic competition, including Narcan, an emergency opioid overdose medication. Meanwhile, a recent study in JAMA found that while the overall number of generic approvals increased from July 2016 to December 2018, about 20% were generics facing limited competition with two or fewer generic competitors, and only 19% were complex generic drugs.

NOTES: Orphan status is designated to drugs that treat rare diseases or conditions, affecting fewer than 200,000 people in the U.S. A drug product was considered complex if specific attributes make it difficult to manufacture the drug or establish equivalence, such as complex active ingredients or complex formulations.

SOURCE: FDA, visit https://bit.ly/2pc4tX0. “Characteristics of Recent Generic Drug Approvals by the U.S. Food and Drug Administration,” JAMA Network Open. 2019;2(10):e1913029. doi:10.1001/jamanetworkopen.2019.13029.

States Move to Enhance Medicaid With Managed Long-Term Care

November 15, 2019

Medicaid is the primary payer for the management of long-term services and supports, leading many states to look to managed care solutions as overall Medicaid spending is projected to grow, even as enrollment remains relatively flat, according to the Kaiser Family Foundation’s latest 50-state Medicaid budget survey. The annual survey identified several managed long-term services and supports (MLTSS) strategies that states have adopted.

by Carina Belles

Medicaid is the primary payer for the management of long-term services and supports, leading many states to look to managed care solutions as overall Medicaid spending is projected to grow, even as enrollment remains relatively flat, according to the Kaiser Family Foundation’s latest 50-state Medicaid budget survey. The annual survey identified several managed long-term services and supports (MLTSS) strategies that states have adopted.

In 21 states, managed care organizations have a contractual relationship with a state Medicaid department, and are paid a set rate per member to provide both acute care and long-term care services. Limited-benefit prepaid health plans (PHPs) are similar, but cover only long-term care services. Some states target coordinating health care services for Medicare-Medicaid dual eligibles, whose care is notoriously costly, with CMS and contracted managed care plans via the Financial Alignment Initiative, or duals demonstration. A handful of states use a combination of these models; 25 states use at least one or more types of capitated managed care arrangements (see graphic below). Several states are poised to grow their MLTSS programs in 2020, with Pennsylvania set to complete a statewide expansion, and Idaho, Illinois and Tennessee expanding their programs’ service areas and/or eligible population.

NOTE: FY 2020 Medicaid spending growth reflects projections in enacted budgets.

SOURCES: Kaiser Family Foundation, “A View from the States: Key Medicaid Policy Changes” and “Medicaid Enrollment & Spending Growth: FY 2019 & 2020.” Visit https://bit.ly/32HK0bh and https://bit.ly/2P9xygs.