Earlier this year, Gallup asked Americans about their top financial concerns. Less than half (44 percent) said they’re worried about paying for routine medical care. More individuals, 58 percent, said they’re concerned they won’t have the money to deal with unexpected costs.
This anxiety is real—moms and dads clearly worry a child’s soccer field injury could push their family over the financial edge—but before drawing conclusions about what’s causing Americans’ health care angst, it’s important to look at this survey in its full context.
First, while medical costs are weighing on the minds of more Americans than concerns about retirement or paying for college, Gallup’s results weren’t much different than they were when the firm asked the same questions 10 years ago. They’re also very similar to Gallup data going all the way back to 2001. Health care is a perennial source of anxiety. As it should be; few issues are more important than one’s medical care.
Perhaps one reason Americans’ concerns are relatively stable, however, is that while the costs of hospital care and physician’s visits have risen, costs for lifesaving treatments and innovations have been stable and, in recent years, even have fallen.
According to an IQVIA Institute for Data Science report released the same month the Gallup poll was taken, spending on medicines increased only 0.6 percent in 2017 after taking into account rebates and discounts. For retail and mail-order pharmacy distribution, spending actually fell, declining 2.1 percent for the year. That drop followed a 0.3 percent decline in retail and mail-order pharmacy distribution spending in 2016.
Spending on medicine dropped in 2017, despite the fact that more Americans relied upon prescriptions. According to IQVIA, doctors dispensed 5.8 billion prescriptions in 2017, up from 5.7 billion the year before and from 5.4 billion in 2013.
On a per person basis, spending on medicine fell an impressive 2.2 percent from $896 in 2016 to $876 in 2017. Since 2008, per-capita spending has risen only one percent annually. The Centers for Medicare & Medicaid Services recorded a very modest 1.3 percentage-point increase in prescription-drug spending in 2016, the most recent year for which they produced data.
IQVIA expects growth in medicine costs to remain stable and low, rising only two to five percent every year over the next five years. Any growth there is, IQVIA said, will be “driven by innovation.” As IQVIA explains, spending tends to rise in years where innovation is more pronounced. To put that in perspective, prices typically rise when new treatments and cures are introduced into the market, treatments and cures that help people live longer, healthier lives.
While higher spending figures are fodder for the headlines, the cures behind them mean fewer moms and dads will have to worry when their children face an illness more serious than a scrape on the soccer field. And those breakthroughs should be cause for celebration, not an excuse to shame the innovators.