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For Immediate Release

Truven Health Analytics' Healthcare Spending Index Shows Upturn in Spending Following a Decade of Slower Growth

New Hepatitis C Drugs Drive Short Term Increase in Costs But Expected to Show Long Term Value

Ann Arbor, MI, Jan. 05, 2015 — Truven Health Analytics' just-released Healthcare Spending Index for Employer-Sponsored Insurance shows that ongoing growth in out-of-pocket spending may be changing patient behavior. It also shows that the introduction of two new drugs have led drug spending to spike for patients under 65 with employer-sponsored insurance (ESI) in the first half of 2014.

The Truven Health Analytics Healthcare Spending Index for ESI uses private sector claims data to analyze spending trends for those with employee-sponsored insurance. Overall, it found that, over the last decade, per capita spending on healthcare for individuals with employer-sponsored insurance grew at an average rate of 5.2 percent per year. At the same time, employee out-of-pocket expenses for deductibles and copays grew at a faster clip of 5.7 percent per year, resulting in an average out-of-pocket cost of $762 per patient in 2013.

During the same decade, outpatient spending grew most rapidly (6.0 percent annually), followed by inpatient spending (4.5 percent annually). Prescription drug spending experienced the slowest growth (4.0 percent annually), however the recent emergence of two new Hepatitis C drugs marked a noticeable departure for prescription drug spending. The study's key findings include:

New Hepatitis C Drug Driving Prescription Drug Spending:

While prescription drug costs are a relatively small part of private insurance spending and showed relatively slower growth in recent years, the latest data show that prescription drug spending is now growing faster than hospital and professional spending. For the four quarters ending in second quarter 2014 prescription drug spending grew 9.6% for the year, compared to 1.5% growth for the prior year. This is a direct result of the introduction of two drugs — Sovaldi® and Olysio® — that offer effective treatment of Hepatitis C. Together, these two drugs comprised 3.3 percent of total prescription drug spending between the fourth quarter of 2013 and the second quarter of 2014.

Spending Increase Was Sharpest Among Young Patients:

Patients from age 0-17 have seen the highest increase in per capita spending, with 6.5 percent annual growth over the last decade (from $1, 476 in 2003 to $2, 772 in 2013). The 45–64 age group continues to have a higher overall level of expenditure ($8, 175) despite a lower growth rate of 4.1 percent annually.

"For the first time we have quantified the immediate cost impact of the new Hepatitis-C drugs that recently reached the market, " said William D. Marder, PhD, senior vice president at Truven Health Analytics. "These drugs cure Hep-C, so although payment systems will be stressed in the short run, they will benefit in the long run due to the avoided downstream liver transplants."

The study also suggests that the steeper spending increases for young patients may imply that parents put off care for themselves during the financial downturn to keep providing for their children. "It will be critical over the coming months and years to continue measuring the level of elasticity that exists between cost and healthcare behaviors, " said Dr. Marder.

The Truven Health Analytics Healthcare Spending Index for Employer-Sponsored Insurance is powered by the Truven Health MarketScan® Research. Databases

Learn more about the Hospital Spending Index

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