Higher health care costs nearly offset the average U.S. family's income gains between 1999 and 2009, according to a RAND study published on Thursday in Health Affairs, MedPage Today reports.
The study found that the median income for an average four-member family increased from $76,000 in 1999 to $99,000 in 2009, which should have meant that families had at least $545 more to spend each month in 2009 than in 1999 (Walker, MedPage Today, 9/8).
However, increases in insurance premiums, out-of-pocket health costs and taxes for health care slashed the additional monthly income down to $95, RAND researchers said (Daly, Modern Healthcare, 9/8).
Over the 10-year period, the researchers found that premiums had increased from $490 to $1,115 per month and out-of-pocket spending had jumped from $135 to $235 per month, which the researchers said was linked to employers shifting more health care costs to their employees (MedPage Today, 9/8). At the same time, annual overall health care spending had nearly doubled, from $1.3 trillion in 1999 to $2.5 trillion in 2009.
Study co-author David Auerbach noted, "Accelerating health care costs are a primary reason that so many American families feel like they are just treading water financially."
Auerbach and co-author Arthur Kellerman added, "America's complex system of financing health care delivery has successfully spread out -- and therefore masked -- the day-to-day consequences of cost growth for many American families" (Sanger-Katz, National Journal, 9/8).
Fewer Health Plans Reduce Hospital Prices, Study Finds
In a separate study also published in Health Affairs, RAND researchers found that hospital prices were about 12% lower in metropolitan areas with the fewest health plans, CQ HealthBeat reports.
According to CQ HealthBeat, the finding appears to confirm the idea that larger health plans tend to have greater negotiating power for lower prices with medical providers. However, health care providers and executives have speculated that concentrating market power among fewer health plans could influence lower payments, which ultimately would affect the quality of care and limit access to care.
Study co-author Glenn Melnick of the University of Southern California's School of Policy, Planning and Development, noted, "There may be a benefit for consumers when health insurance plans are more consolidated because it tends to drive down hospital costs," adding, "As long as there is enough competition to keep health plans honest, the consolidation has a good result on prices."
Melnick wrote, "Our findings suggest that if policy makers are interested in lowering costs, they should find a way to restore competition among hospitals, in addition to assuring competition among health plans" (CQ HealthBeat, 9/8).