U.S. healthcare usage and spending resumes rise in 2013: report

Tue Apr 15, 2014 12:06am EDT

Devices used to take blood pressure, temperature, and examine eyes and ears rest on a wall inside of a doctor's office in New York March 22, 2010. REUTERS/Lucas Jackson

Devices used to take blood pressure, temperature, and examine eyes and ears rest on a wall inside of a doctor's office in New York March 22, 2010.

Credit: Reuters/Lucas Jackson

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(Reuters) - Americans used more health services and spent more on prescription drugs in 2013, reversing a recent trend, though greater use of cheaper generic drugs helped control spending, according to a report issued on Tuesday by a leading healthcare information company.

Spending on medicines rose 3.2 percent in the United States last year to $329.2 billion. While that was far less than the double-digit increases seen in previous decades, it was a rebound from a 1 percent decline in 2012, the report by IMS Health Holdings Inc. found.

Among factors driving the increased spending were the cost of new medicines, price increases on some branded drugs, a $10 billion reduced impact of patent expirations compared with 2012, and the first rise in the use of healthcare services in three years, IMS found.

IMS compiles and provides data on prescription drug use and trends for the pharmaceutical and healthcare industry.

The relatively small spending increase was helped in part by greater use of cheap generic drugs, which edged up to 86 percent of all prescriptions filled in the United States from 84 percent in 2012, despite fewer major new generic drug introductions compared with the impact seen in 2012.

Healthcare utilization was up across the board, with rises in doctor office visits, hospitalizations and volume of prescriptions filled, IMS said.

The increased use of healthcare services does not reflect those newly insured under the Affordable Care Act and Medicaid expansion, which did not fully kick in until this year. But it could be reflective of declines in unemployment, with more people gaining employer-based health insurance, and recent gains in consumer confidence.

"The recession was officially over a long time ago, but what has taken a much longer time is for the (healthcare services) demand to recover," Michael Kleinrock, director of research development for IMS Institute for Healthcare Informatics, said in a telephone interview.

"In late fall of 2012, we started to see a beginning of the recovery in terms of new therapy starts," Kleinrock said.

New medicines for cancer, hepatitis C, multiple sclerosis, diabetes and rare diseases has led to a shift in some patient spending tendencies, the report found.

Patients gained access to 36 novel new medicines in 2013, including a record 17 so-called orphan drugs that treat small patient populations at typically very high cost.

"We saw patients see more specialists than primary care for the first time," Kleinrock said. "Incurring a primary care visit co-pay in order to be referred to see a specialist certainly doesn't feel like value for money, so many patients may be self referring," he suggested.

Those trends could well continue over the next two years as several promising new cancer drugs come to market, as well as new oral hepatitis C treatments with extremely high cure rates and few side effects.

The first of those hepatitis drugs, Sovaldi, from Gilead Sciences Inc, has led to intense criticism for its price tag of about $84,000 for a 12-week course of treatment.

"It's interesting to see the debate about cost when you're curing a disease which has much more overall cost," said Kleinrock, referring to the cost of treating liver cancer or transplants if the hepatitis progresses without treatment.

While the overall number of hospitalizations increased, emergency room visits that turn into in-patient admissions declined dramatically, by 14.6 percent, IMS found.

That could point to continued use of high-cost emergency services for non-emergency primary care for many people.

On that front, Kleinrock said, "We noted, that perhaps there's still some work to do."

(Reporting by Bill Berkrot; Editing by Leslie Adler)

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California state worker Albert Jagow (L) goes over his retirement options with Calpers Retirement Program Specialist JeanAnn Kirkpatrick at the Calpers regional office in Sacramento, California October 21, 2009. Calpers, the largest U.S. public pension fund, manages retirement benefits for more than 1.6 million people, with assets comparable in value to the entire GDP of Israel. The Calpers investment portfolio had a historic drop in value, going from a peak of $250 billion in the fall of 2007 to $167 billion in March 2009, a loss of about a third during that period. It is now around $200 billion. REUTERS/Max Whittaker   (UNITED STATES) - RTXPWOZ

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