Health Care Spending in New York Growing Faster Than Rest of U.S.

Spending per person in employer-sponsored plans reaches all-time high of $6,335

NYSHealth contact:
Michele McEvoy
mcevoy@nyshealth.org
(212) 292-7293

HCCI contact:
Sally Rodriguez
rodriguez@healthcostinstitute.org
(571) 257-3838

July 30, 2019, NEW YORK
— Health care spending for the average New Yorker with employer-sponsored health insurance is increasing faster in New York State than the rest of the country, according to a new analysis released today by the New York State Health Foundation (NYSHealth) and the Health Care Cost Institute (HCCI).

Per-person spending grew 6.4% statewide, compared with 4.2% nationally. The majority of spending growth came from price increases, not from patients using more services.

“We have a health care affordability crisis in New York State, and prices are the main culprit,” said David Sandman, Ph.D., President and CEO of NYSHealth. “It’s a growing problem for working and middle-class New Yorkers with job-based health insurance coverage.”

The report offers the first comprehensive New York State-level analysis of health care spending. It looks at use of services and prices by type of service: inpatient, outpatient, professional services (such as doctor’s visits), and prescription drugs. The only category where New York wasn’t outpacing the country was outpatient services; spending across all other types grew faster in New York relative to the national average.

“Spending is both high and growing fast in New York State,” said Niall Brennan, President and CEO of HCCI. “These findings point to certain services with particularly high relative price growth, such as hospital and prescription drug spending, as areas to explore for potential cost control efforts in New York.”

Other key findings include:

• Per-person spending in New York State was higher than the national average in each year from 2013 to 2017. New York spending also grew faster during the same period than in almost all other states.
• By 2017, New York had the 8th-highest per-person spending in the country.
• Professional services account for nearly 40% of total employer-sponsored health care spending in New York State, compared to 34% nationally.
• New York State’s per-person spending for all prescription drug categories was approximately 20% higher than national per-person spending in 2017, despite a shift from the use of brand name to generic drugs in New York; patients in New York spent $1,300 per person compared to $1,065 nationally.
• Spending for outpatient services in New York, however, is notably lower than national spending (an average of $1,362 per person in New York compared to $1,580 per person nationally.

“We need greater transparency into health care prices, which are almost a complete black box,” said Mark Zezza, Ph.D., Director of Policy & Research at NYSHealth. “More and better information about prices can support more informed decision-making about where to purchase care.”

The analysis was based on commercial health insurance claims for 2.1 million New Yorkers covered by four major health insurers—Aetna, Humana, Kaiser Permanente, and UnitedHealthcare—from 2013 through 2017.

The full report, “Health Care Spending, Prices, and Utilization for Employer-Sponsored Insurance in New York,” is available here.

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The Health Care Cost Institute’s mission is to get to the heart of the key issues impacting the U.S. health care system—by using the best data to get the best answers. HCCI stands for truth and consensus around the most important trends in health care, particularly those economic issues that are critical to a sustainable, high-performing health system. Find HCCI online at www.healthcostinstitute.org or on Twitter @healthcostinst.

The New York State Health Foundation is a private, statewide foundation dedicated to improving the health of all New Yorkers, especially the most vulnerable. Find NYSHealth online at www.nyshealth.org and on Twitter @nys_health.

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