Medicare spending in Minnesota rebounded in 2021

Medical spending in Minnesota returned to the pre-pandemic trajectory in 2021, when a 12% increase in payment for surgeries, clinic visits, prescriptions and other services offset a 2% decline in 2020.

COVID-19 waves could increase medical spending in 2021, but Wednesday’s report from MN Community Measurement suggested mostly that people sought specific forms of care that they put off in 2020.

Health care spending growth has also outpaced wage growth for most Minnesotans, said Julie Sonnier, president of MN Community Measurement, a nonprofit that publishes health care quality and cost data.

“We’re still on a long-term path that’s really not sustainable,” she said. “We haven’t found the magic bullet for cost control yet.”

The report is based on the amount paid out-of-pocket by more than 1 million non-elderly Minnesotans and their private health insurance plans. Those sources combined to spend $8,244 per patient per year on medical services – a figure fueled by outpatients with chronic illnesses and the highest costs.

This compares to $7,332 per patient in 2020 and $5,904 in 2014, when the data was first publicly reported. The data is provided by the state’s four largest health insurers: Blue Cross and Blue Shield of Minnesota, Medica, HealthPartners and PreferredOne.

The report also reminds that inpatient hospital care can cost Minnesotans thousands, but other sources of medical care drive up the total expense.

“It’s very expensive for the people who need it,” Sonnier said, “but many of us don’t end up hospitalized in a year.”

Spread across all non-elderly Minnesotans with private insurance, annual spending on inpatient hospital services was $1,176 per person in 2021. By comparison, annual spending reached $1,512 per capita on drugs and pharmacy services and $3,612 per capita on surgeons, primary care doctors. and other physicians.

Risk-adjusted expenses of more than $10,000 per year varied by region for Rochester residents who were more likely to receive care in the southeastern Minnesota market, dominated by Mayo Clinic.

Minneapolis residents on average used more medical care but spent slightly less, Sonnier said, probably because competition in the Twin Cities medical market drives down prices. St. Cloud residents had even lower annual spending, but mostly because they were less likely to have medical care in 2021.

Non-elective surgeries were suspended under a state emergency order during Minnesota’s first COVID-19 wave in the spring of 2020, and many providers canceled them later that winter when a more severe wave hit the state . Fears of COVID-19 kept some patients away from hospitals and clinics in 2020, but they may have fewer options in 2021 due to demands for care for uncontrolled diabetes or painful knees.

How this translates to medical spending in 2022 is unclear. Allina Health and Fairview Health, Minnesota’s two largest medical providers, reported improving revenue in 2021 but worsening financial problems in 2022. His hospitals especially lost money when staff shortages prevented him from discharging recovering patients to nursing homes and freeing up beds for new patients.

Minnesota’s efforts to rein in costs have focused on value-based contracts, whereby insurers pay for the quality of patient care rather than the quantity. Low-cost telemedicine has also been proposed as a way to reduce in-person clinic visits, but its widespread use in 2021 has not had much impact.

Sonier said physicians are still figuring out whether telemedicine can replace in-person visits and which specialties, such as mental health, offer the most potential.

“The jury is still out there on long-term trends and where it will offer the most value,” she said.

MN Community Measurement assigned patients to the primary care clinics based on which they received most of their care in 2021. Clinics can be compared by the risk-adjusted costs of those patients – with the idea being that efficient clinics helped patients stay in better health and survive. Preventable Expenses.

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