Over thestudied time period, low back and neck pain was the top area ofexpenditures for private insurance; diabetes and ischemic heartdisease were the areas of highest expenditure for public programs.(Image: Shutterstock)

A new analysis published in JAMA finds that total health carespending in the U.S. grew by close to $2 trillion dollars between1996 and 2016. The report estimates that total spending in healthcare grew from $1.4 trillion to $3.1 trillion during that timeperiod.

The paper also found that health care spending increased at anannualized rate of 2.9 percent for public plans, 2.6 percent forprivate insurance, and 1.1 percent for out-of-pocket payments.Health care spending was estimated at $5,259 annually per person inthe U.S. in 1996; it had grown to an annual cost of $9,655 perperson 20 years later.

Related: What's driving growth in employer health carespending?

The article was accompanied by an editorial by Andrew B. Bindman, M.D., aprofessor with the Philip R. Lee Institute for Health PolicyStudies at the University of California, San Francisco. Bindmannoted that rising health care expenditures are not primarily drivenby population growth and utilization of services. Bindman saidrising health care costs are driving higher spending—and many ofthose rising costs are due to consolidation in the health care providerindustry.

Health care spending has become a top policy issue

The JAMA articles come at a time when health care is thenumber-one domestic issue for many Americans, according torecent polls. The 2020 elections are expected to feature strongdebate on how to improve the nation's health care system,especially when it comes to easing the financial burdens created byhigh health care costs.

The study looked at close to six million insurance claims, butexcluded some expenditure categories, such as durable medicalequipment expenditures, expenditures for over-the-counter drugs,and infrastructure development.

It found that after adjusting for increases in population sizeand the aging population, 108 of 154 health conditions had seenspending increases between 1996 and 2016. Over the studied timeperiod, low back and neck pain was the top area of expenditures forprivate insurance; diabetes and ischemic heart disease were theareas of highest expenditure for public programs such as Medicare.Dental care was the area of highest out-of-pocket expenditures.

The analysis described spending increases as "substantial" inthese areas. Care for low back and neck pain, for example, saw aspending increase that was considerably higher than the increase incases treated. "Although the spending on low back and neck painincreased by 6.7 percent annually between 1996 and 2016, the numberof prevalent cases increased by only 1.1 percent annually and thehealth burden (measured using disability-adjusted health-years)increased by only 1.3 percent annually," the report said, addingthat the rise in spending was troubling because this was an areawhere cost-saving strategies have been a priority for many payersand providers—strategies that apparently were ineffective.

Consolidation is creating "Empires:" JAMA editorial

The Bindman editorial noted that high health care costs are awell-known feature of the U.S. system. "International comparisonsreveal US prices that are many times higher than charged inEuropean and other high-income countries for the vast majority ofdiagnostic and therapeutic procedures," Bindman wrote. "Forexample, outpatient computed tomography and magnetic resonanceimaging scans are priced 4 to 5 times higher in the United Statesthan in the Netherlands and Switzerland. Such price differences areeven greater for hospital-based care."

Bind added that although researchers don't understand all thereasons health care costs are higher in the U.S., one factor uniqueto this country is the growing trend of consolidation of hospitalsand provider groups in the U.S.

"U.S. physicians are increasingly working for hospitals, andhospitals are in turn merging to formulate large chains. Althoughthere is the potential for these larger health systems to createmore efficient, integrated delivery systems, this does not appearto be happening on a widespread scale," Bindman wrote. "The mostvisible aspect of what health system consolidation does is limitcompetition, which results in higher prices. This is despite thefact that the vast majority of these consolidated health systemsare nonprofit entities."

Read more: 

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• Monopoly-like consolidation common in health care,study says