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Hospital spending increases three-fold over 23 years

Per capita healthcare spending in Medicaid expansion and non-expansion states is similar, new CMS report says.

Susan Morse, Senior Editor

Most states experienced faster healthcare spending growth in 2014 from the previous year due to Medicaid expansion and enrollment in exchange plans, but a new federal study shows the expenditures were similar in both expansion and non-expansion states.

Per capita health spending in Medicaid expansion and non-expansion states grew at 4.4 and 4.5 percent respectively, according to state-level healthcare spending data for 1991 to 2014 released Wednesday by the Centers for Medicare and Medicaid Services' Office of the Actuary.

The similar growth in expansion and non-expansion states is likely due to an increase in the number of insured consumers in expansion states and faster growth in spending per insured person in non-expansion states, the report said.

[Also: First year and a half of ACA Medicaid expansion saw 19% spike in adults filling prescriptions]

Spending for hospital services increased from $328 million in 1991 to $980 million in 2014.

States with the highest average annual growth for hospital services, at rates of 7 percent of higher, include Rhode Island, at 7.7 percent, Delaware, at 7 percent, North Dakota at 7.2 percent, South Dakota at 7.1 percent, Idaho at 7.9 percent, Montana at 7 percent, Utah at 7.3 percent, Wyoming at 7.3 percent, Alaska at 7.7 percent, Oregon at 7.2 percent and Washington at 7.1 percent.

The District of Columbia had the lowest growth for hospital spending at 3.8 percent. States below a 5 percent growth include New Jersey, New York, Pennsylvania, Alabama and  Louisiana.

[Also: Maryland's tough new hospital spending proposal seen as 'nationally significant']

In 2014, the average national per capita spending on healthcare was $8,045, but this varied by region.

New England and Mideast regions had the highest levels of total per capita spending in 2014, at $10,119 and $9,370, respectively, 26 and 16 percent higher than the national average.

In contrast, the Rocky Mountain and Southwest regions had the lowest levels of total personal healthcare spending per capita at $6,814 and $6,978, respectively. This is roughly 15 percent lower than the national average.

Under private health insurance, average spending per enrollee was $4,551 in 2014, an annual increase of 3.3 percent since 2009 when it was $3,872.

Alaska had the highest amount of such spending at $5,958, or 31 percent above the national average.

Nevada had the lowest per enrollee spending at $3,417, or 25 percent below the national average.

Private health insurance spending grew more rapidly in states that did not expand Medicaid than in states that did, at 6.8 percent and 4.6 percent, respectively.  A majority of this difference reflects faster private health insurance enrollment growth in non-expansion states, at 3.2 percent, compared to that for expansion states, at 1.9 percent.

Medicaid spending increased 12.3 percent from 2013 to 2014 for states that expanded Medicaid, compared with 6.2 percent for states that did not.

However, for enrollees in expansion states, Medicaid spending declined considerably, at -5.1 percent in 2014. Per enrollee, Medicaid spending in the non-expansion states increased 5.1 percent.

[Also: American Medical Association opposes Medicaid funding caps, adopts new policies]

North Dakota had the highest amount per enrollee for Medicaid spending at $12,413, whereas Illinois had the lowest per enrollee spending at $4,959.

Under Medicare, states with the lowest spend were generally in the western United States that have less densely populated areas with younger enrollee populations.

The highest Medicare spend states were generally in the eastern United States, the report said.

New Jersey had the highest per enrollee Medicare spending in 2014 at $12,614, with spending levels roughly 15 percent above the national average.

Montana had the lowest per enrollee Medicare personal healthcare spending, at $8,238 per enrollee, or 25 percent below the national average.

The modest recovery since the 2008 economic recession has also had a sustained effect on lowering spending.

Every state experienced slower growth in per capita personal health care spending from 2010-2013 than during 2004-2009, according to the report.

For 2010-2013, per capita personal health spending grew at a rate of 2.8 percent per year on average. This rate was 5.2 percent during 2004-2009.

"Recent economic and health sector factors have had clear impacts by state, both by payer and in the rates of overall per capita personal healthcare expenditure growth; however, during the 2009 to 2014 period, the variation in spending between the lowest and highest states was virtually unchanged," said the report's lead author David Lassman.

The report was published as a web first in Health Affairs.

Twitter: @SusanJMorse

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