OHA report shows drug price increases contribute to 49% jump in Oregon health care costs over 6-year period
Health care costs rose by 49% per person over a 6-year period in Oregon as prescription drug prices increased greatly.
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The 49% jump represented an average increase of 6.9% per year from 2013-2019, according to a new Oregon Health Authority report. Medicare costs grew 58% per person, while commercial costs increased 45%. Medicaid costs grew 32% per person during that time frame, according to the report.
Pharmacy costs grew more than any other service category from 2013-2019, driven by a 20% annual growth in Medicare drug costs, according to the report. Prescription drug costs rose 185% for Medicare patients, equivalent to more than $2,200 per person during that time frame. Prescription drug costs rose almost 93% for Oregonians with commercial insurance, while those on Medicaid saw an increase of more than 79%, according to the report.
Professional services, such as primary care visits and medical procedures at doctor’s offices, was the 2nd leading contributor to increased health costs. Services rose by nearly 76% for people with commercial insurance, and almost 57% for Oregonians on Medicare. Costs rose by nearly 42% for those on Medicaid.
While data did not include costs from 2020 or 2021, the report noted that future reports will describe the impact of COVID-19 on health care costs, prices, and utilization.
Oregon’s 6.9% annual increase in health care cost per person was higher than the national average increase from 2013-2019, which was 4% per year, according to the report. Total costs per Oregonian rose from $4,506 in 2013 to $6,713 in 2019. The state’s largest cost hike occurred in 2016 with an 8.3% increase.
The report used claims data from Oregon’s All Payer All Claims database to calculate cost growth trends. Health care costs in Oregon are growing at a rate that is not sustainable, and costs are projected to continue growing faster than both the economy and wages in the state, according to the report.
“Oregon is taking bold steps to control the rising cost of health care,” the report said. “As the fourth state to establish a health care cost growth target program, Oregon is beginning to shine a light on the key drivers of health care costs and setting the stage to hold both the public and private markets accountable for containing cost growth.”