As the average family brings in more income, they also tend tospend more on out-of-pocket health care costs, according to JPMorgan ChaseInstitute’s report, “Paying Out-of-Pocket- The Healthcare Spending of 2Million US Families.”

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The institute analyzed the health care-related expenditures of 2.3 million Chase Bankcustomers, aged 18 to 64, between 2013 and 2016 (the names of thecustomers weren’t identified within the analysis). The analysisincluded payments made using either a Chase credit or debit card,or electronic bill pay, and excluded health care payments made viacash, check, non-Chase cards in health reimbursement accounts,premium payments and health insurance reimbursements.

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The analysis found that families spent on average $714 or 1.6percent of their take-home income on out-of-pocket health carespending in 2016. Out-of-pocket health care spending grew by anaverage annual rate of 4.3 percent between 2013 and 2016, andremained a relatively constant share of take-home income.

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The reason the financial services company’s institute conductedthis analysis:

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“Out-of-pocket health care spending has a meaningful impact onfamilies’ financial lives and their ability to access credit,” theauthors write. “As the JPMorgan Chase Institute has documented,roughly one in six families makes an extraordinary medical paymentin any given year. These extraordinary medical payments are timedaround moments of increased ability to pay and associated with 9percent higher credit card debt a year later.”

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More families may have made out-of-pocket expenditures at theirdoctor’s office and pharmacist, but the average expenditure amountwas highest for dental visits.

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The percent of families with positive out-of-pocket health carespending by health care category in 2016: doctor, 52 percent; drug,44 percent; dental, 32 percent; vision, 32 percent; hospital, 27percent; chiropractor, 8 percent; other health care services(including non-doctor services or products, such as medicalsupplies, lab tests, and home health services), 53 percent.

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However, the average positive out-of-pocket health care spendingby category in 2016: doctor, $293; drug, $125; dental, $465;vision, $232; hospital, $325; chiropractor, $268; other services,$330.

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Out-of-pocket health care spending was highly concentrated amonga small segment of the population, according to the study. The top10 percent of health care spenders contributed 49 percent of totalout-of-pocket spending in 2016, spending 9 percent of theirtake-home income on out-of-pocket healthcare expenses. Seventeenpercent of families had no health care spending in 2016.

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Whenever families earned more income, they tended to makemore out-of-pocket health care-related expenditures.

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“Families made larger health care payments in the months and theyears when they had a higher ability to pay,” the authors write.“Elevated dental and hospital payments primarily contributed tohigh health care spending.”

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Among Chase Bank’s 23-state footprint, there was a “dramatic”variation in out-of-pocket health care spending. Families inColorado spent the most on health care in 2016, with an averageannual expenditure of $916, while families in Oklahoma spent thehighest fraction (1.7 percent) of their take-home income on healthcare.

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“Out-of-pocket health care expenses represent a stable share ofhousehold income in aggregate, but are a source of financial strainfor certain families,” the authors write. “Health care reformshould take into consideration the impact on households who aremore financially burdened by health care expenses --specifically older, low-income, and female account holders.”

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The authors also recommend that health care providers and payersimplement more transparent pricing and payment options so thatconsumers can better manage health care expenses, considering thathealth care spending may be large, unexpected, and concentrated inthe months and years when families have a higher ability to pay.Moreover, cost-containment measures, including value-based care,could have meaningful impacts on costs borne by families, not justby insurers and health care providers.

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“Finally, wide variation in levels and burden of health carespending across geographies underscores the importance ofhealth care as a state and local policy issue,” the authorswrite.

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Katie Kuehner-Hebert

Katie Kuehner-Hebert is a freelance writer based in Running Springs, Calif. She has more than three decades of journalism experience, with particular expertise in employee benefits and other human resource topics.