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For Immediate Release

Truven Health Analytics Study Predicts Double-Digit Growth for Employee Out-of-Pocket Costs, While Commercial Payer Costs Will Grow More Modestly

Claims Data Analysis Pinpoints Outpatient and Prescription Drug Spending As Key Cost Drivers

Ann Arbor, MI, Feb. 17, 2015 — Employee out-of-pocket healthcare spending rose by almost 6 percent in 2013 and is expected to grow 12 percent annually in 2014 and 2015, according to semi-annual Truven Health Analytics™ U.S. Benchmarks and Trends reports for employers and health plans. Truven Health analysts found more modest spending increases for commercial payers: an increase of more than 3 percent in allowed medical and pharmacy costs in 2013, and expected increases of approximately 5 percent in both 2014 and 2015. This report is based on analysis of de-identified claims data extracted from the Truven Health MarketScan® Research databases.

The researchers also found that the total medical and pharmacy costs for active employees and their dependents increased from $4, 420 to $4, 569 per member per year (PMPY) from 2012 to 2013. These increases were felt across the board; there was a 3.8 percent increase in outpatient medical costs and a 3.2 percent increase in pharmacy costs. Plan sponsors have been sharing these increased costs with their members, leading to member out-of-pocket expenses that are nearly 6 percent higher than 2012.

This semi-annual study analyzes the claims experience of over 330 employers representing 15.1 million insured lives across a full spectrum of industry types, health plans, and pharmacy benefit managers.

“Timely and appropriate benchmark comparisons are essential for payers to identify areas for intervention, measure progress, and provide management with the appropriate context for making critical decisions, ” said Barbara Graovac, senior vice president at Truven Health Analytics. “The insights offered in the Truven Health U.S. Benchmarks and Trends reports provide payers with an opportunity to mitigate trend drivers and develop more effective benefits programs.”

Report findings include:

Outpatient Spending on the Rise: Total allowed outpatient spending rose as much as 3.8 percent in 2013, heavily driven by emergency department (ED) spending. In 2012, there were double-digit increases in total ED costs, and those costs continued to grow up to 8.5 percent between 2012 and 2013. In addition, total outpatient surgery costs increased as much as 7.7 percent in 2013. Some of the increases in outpatient spending can be explained by the shift from inpatient to outpatient settings. The continued increase in outpatient utilization is expected and, in many cases, may help to reduce overall expenses.

Prescription Drug Spending Increases: Pharmacy claims expenses increased 3.2 percent from 2012 to 2013, spurred by specialty pharmacy cost increases of 12.2 percent, or $236 PMPY. Specialty pharmacy now accounts for as much as 26.3 percent of total pharmacy spending across both medical and prescription drug segments. Specialty drugs like Humira® and Enbrel® for rheumatoid arthritis, Copaxone® for multiple sclerosis, and Revlimid® and Gleevec® for various cancers were among the top 20 drugs based on total spending in 2013.

Few Chronic Conditions Account for Great Deal of Cost: Fifteen common chronic or cancer conditions, including asthma, lower back disorders, substance abuse, osteoarthritis, breast cancer, depression, and coronary artery disease, account for nearly a quarter of all medical spend in 2013.

Truven Health analysts executed this study using data from the MarketScan® Commercial Claims and Encounters Research Databases, which includes medical and drug claims data from employers and health plans. It contains data for nearly 60 million individuals annually, encompassing employees, their spouses, and dependents who are covered by employer-sponsored private health insurance.

Download the employer report here and health plan report here.

About Truven Health Analytics, part of the IBM Watson Health Business

Truven Health Analytics®, part of the IBM Watson Health™ business, provides market-leading performance improvement solutions built on data integrity, advanced analytics and domain expertise. For more than 40 years, our insights and solutions have been providing hospitals and clinicians, employers and health plans, state and federal government agencies, life sciences companies and policymakers, the facts they need to make confident decisions that directly affect the health and well-being of people and organizations in the US and around the world. The company was acquired by IBM in 2016 to help form a new business, Watson Health. Watson Health aspires to improve lives and give hope by delivering innovation to address the world’s most pressing health challenges through data and cognitive insights.

Truven Health Analytics owns some of the most trusted brands in healthcare, such as MarketScan®, 100 Top Hospitals®, Advantage Suite®, Micromedex®, Simpler® and ActionOI®. Truven Health has its principal offices in Ann Arbor, MI, Chicago, IL, and Denver, CO.


Brian Erni
For Truven Health Analytics
J. Roderick, Inc. Public Relations