Health care spending for middle-age Americans booming

Experts say increased use of services, expanded screening, technical advances and more in-office procedures are driving costs.

By Victoria Stagg Elliott — Posted Nov. 9, 2009

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There is a big reason why more money is being spent on health care: aging baby boomers.

The Agency for Healthcare Research and Quality, in a statement issued Oct. 15 and a report published Aug. 21, said the number of people age 45 to 64 is growing, as are the costs for their health care.

"A much greater use of services is a big part of the growth in spending," said Katherine Swartz, PhD, health policy and management professor at Harvard University's School of Public Health.

There were 54.2 million people in the 45 to 64 age group in 1996 and 76.1 million in 2006. Health-related expenses for the age group nearly doubled, increasing from $186.8 billion to $370.1 billion. That works out to a 2006 average of $4,863 per person, up from $3,446 in 1996. (Dollar figures adjusted for inflation to reflect 2006 prices.)

"It's quite an increase," said Stuart Guterman, assistant vice president at the Commonwealth Fund. "We just keep spending more and more on health care."

The cost of a health system encounter also increased. The average cost of a physician office visit increased from $128 to $207. Prescription medicine purchases grew from $103 to $199, and emergency department visits went up from $563 to $947.

"All the per-visit averages went up," said Steven Machlin, deputy director of the Division of Statistical Research and Methods in the Center for Financing, Access, and Cost Trends at AHRQ.

Advances driving up costs

Experts say this is because boomers are getting more procedures and other services, in part because of technical advances.

"You can do more and more things on an outpatient basis," Guterman said. "If you had cataract surgery 25 years ago, you would have to go to the hospital, and it was very expensive and inconvenient. Now, you go into the doctor's office and have it done and then you go home to recover. It is cheaper, but it also means more people can do it."

Rapid in-office tests also are more readily available. Although these may be inexpensive individually, when done on a wide scale they add to the total cost of care.

People also are taking more prescription medications, which increases the need for monitoring. "Even watchful waiting costs money," Swartz said.

Other technical advances driving up health care costs include increasing availability of cancer screenings, combined with the costs of following up on false-positive results, the report said.

Experts are concerned about increases in Medicare costs as this demographic group ages. Although previous reports say expenses for the current Medicare population are escalating, the rate of growth is actually higher for middle-age patients.

According to an AHRQ report issued Aug. 26, the per-capita health care spending for people older than 65 increased from $6,989 in 1996 to $9,080 in 2006. This led to $333.3 billion in health-related expenses for this group in 2006. About $227.3 billion was spent on health-related expenses for this group in 1996, and $333.3 billion was spent in 2006 -- an increase of less than a third.

Most expenses for middle-age people were covered by private insurance, with approximately 56.3% paid for this way in 2006. Another 20.5% were paid by patients, and 7.2% were covered by Medicaid. About 8.8%were covered by Medicare, with other financing sources accounting for the remainder. These percentages were similar to the 1996 figures.

Recession's effect uncertain

It's unclear whether these upward spending trends have continued beyond 2006 into recessionary times. Several surveys have noted declines in the use of physician services, and in patients delaying care, although these were not broken down by age.

Middle-age people, however, tend to be the group most likely to have insurance, and an Oct. 29 report by the Kaiser Commission on Medicaid and the Uninsured found no change in the uninsurance rate for those age 55 to 64 from 2007 to 2008. Declines were noted in those age 35 to 54, although these were less than for young adults.

Anecdotal evidence suggests, however, that this middle-age group also has felt the recession's sting and may have made some health care cutbacks.

"We have seen an increase in 'no-shows' or delays for patients who have lost health insurance or have high deductibles and therefore put off or delay preventive health care testing because of financial concerns," said JoAnn V. Pinkerton, MD, director of the Midlife Health Center at the University of Virginia.

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