Out-of-pocket healthcare spending in the U.S. increased across all states and demographic groups in 2017, following a three-year upward trend that culminated in a record year-over-year growth rate, according to a report from JPMorgan Chase Institute.
JPMorgan Chase released the second round of its now-annual publication after analyzing financial transaction data from a representative sample of Chase customers across 23 states.
“It is important to track out-of-pocket healthcare spending trends because healthcare spending is intricately linked to families’ cash flows,” co-authors Diana Farrell and Fiona Greig wrote in the report. “As we have previously demonstrated, account holders increase their out-of-pocket healthcare spending by 60 percent in the week after receiving a tax refund, and the majority of the increase goes toward in-the-moment, in-person care.”
In other words, Farrell and Greig said, cash flow dynamics affect not only when people pay for their healthcare, but also when they consume it.
After 3.5 percent year-over-year growth between 2014 and 2015 and 5.5 percent growth between 2015 and 2016, 2017’s numbers were the highest yet, reaching 8.5 percent year-over-year growth. The burden of spending as a percentage of take-home income also saw an uptick.
High-income families experienced the fastest growth in healthcare spending in 2017, but low-income families experienced the highest growth in healthcare spending burden—a first after three years of study. That burden increased across all populations in the U.S., but low-income families and those living in Utah saw the highest rates. Utah residents also spent the most on out-of-pocket care in 2017, averaging $864 a year.
California as a whole experienced the steepest growth in healthcare spending in 2017, with annual out-of-pocket costs that averaged between $561 and $640. The majority of growth was seen in the state’s coastal region.
Farrell and Greig said the growth in overall spending can likely be attributed to changes in healthcare prices, cost sharing agreements and shifts in insurance plans, including higher deductibles. Out-of-pocket spending, they noted, grew most at hospitals and other medical practices, while they decreased at drug stores for the third year in a row.
“Out-of-pocket healthcare costs affect decisions about whether and when to seek medical care,” the authors wrote. “Because of the importance of prevention and early intervention in mitigating total healthcare costs, deferring care could result in worse healthcare outcomes and larger costs.
Therefore, it is critical that we continue to monitor the levels and trends in out-of-pocket healthcare costs borne by families.”