Blog: Utah Foundation’s Health Cost Series examines cost drivers

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Blog: Utah Foundation’s Health Cost Series examines cost drivers

By: Utah Foundation Staff

Editor’s note: The Kem C. Gardner Policy Institute occasionally publishes blogs from partners in our community. This blog features research by the Utah Foundation. The opinions and research expressed are those of the author alone and do not reflect an institutional position or research by the Gardner Policy Institute. We hope the information shared contributes to Utahn’s understanding of health care costs and policy, and in turn help people formulate INFORMED DECISIONS™.

In 2016, Utah Foundation’s Priorities Project found that the cost of health care was Utahns’ biggest concern. In response, Utah Foundation produced a three-part Utah Health Cost Series from December 2017 to June 2018. The series provides an analysis of the overall cost of health care spending in Utah, the cost of health insurance for Utahns, and the overall cost of Medicaid in Utah.

Utah Foundation found that Utahns spend less per capita on health care than any other state in the nation. Several factors help explain this, some of which include Utah’s demographics and health behaviors, low enrollments in Medicare and Medicaid, a small number of hospital beds, and a relatively high uninsured rate. Yet costs continue to rise. Among the main drivers of provider cost increases nationally are: the high cost of new medical devices and pharmaceuticals; overtreatment; consolidation among health care providers; and increasing administrative complexity. One of the most striking findings of the research is that hospital rates in Utah can vary significantly for the same service, by up to four times in some cases.

Meanwhile, insurance costs have been increasing at a slower pace than in previous decades, although high-deductible plans are far more prevalent than they used to be. In fact, enrollment in high-deductible plans in Utah has increased from 3 percent to 30 percent during the past decade. High-deductible plans typically shift more of the cost of health insurance from the employer to the employee.

Utah Foundation also found that 61 percent of Utahns purchase health insurance through employers. This is the highest in the nation and significantly higher than the U.S. average of 49 percent. Interestingly, Utah employers have been absorbing a much greater proportion of premium increases in recent years compared to employers nationally.

Utah Foundation also examined the cost of the state Medicaid program. Currently, Utah has the lowest per capita Medicaid costs in the U.S., and a fraction of the per capita cost in, say, New York. Utah also spends the least per enrollee. Medicaid takes up less than 20 percent of the state budget, eighth lowest in the nation.

Although children make up nearly two-thirds of Utah’s Medicaid enrollment, they account for less than one-third of total spending. Individuals with disabilities, meanwhile, make up less than 15 percent of enrollment, but account for nearly half of all spending.

While the state has expanded eligibility to a limited portion of the adult population, Utahns will vote on whether to adopt a full Medicaid expansion as outlined under the Affordable Care Act in November (Proposition 3). The issue of Medicaid is a complex one in Utah. As the Kem C. Gardner Policy Institute highlights in a recent policy brief, Medicaid expansion will likely remain a key issue for years to come.

Utah Foundation’s three-part Utah Health Cost Series can be found at utahfoundation.org.

2018-10-05T09:55:34+00:00October 5th, 2018|Blog, Economics and Public Policy, Practice Areas, Health Care|