Costs for outpatient facility care continue to rise, driven by a combination of clinical and contractual factors. One major contributor to these costs is the increased use and cost of outpatient-administered drugs, including radiopharmaceuticals and high-cost oncology treatments, which often are delivered in hospital outpatient settings.

The adoption of new technologies, such as advanced implants and minimally invasive surgical tools, also has added to procedure complexity and associated costs. In addition, reimbursement structures that tie payment to a percentage of billed charges, particularly for drugs and implants, have amplified cost growth, especially in cases where list prices have increased significantly.

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Last year’s index identified approvals for new drugs or new uses for existing drugs, as well as increased use of GLP-1 drugs, as drivers of prescription drug costs.

“We anticipate these market forces will continue to contribute meaningfully to prescription drug trends in 2025,” the report said. “We also anticipate the introduction of additional biosimilars -- drugs made from living organisms that are very similar to existing biologic medications -- will be a moderating force by increasing competition in the specialty drug market. The impact from biosimilars is reflected in the pharmacy trend.”

Since the company began publishing the index 20 years ago, health care costs for American families have nearly tripled, Principal and Consulting Actuary Deana Bell said.

“Annual growth has averaged 6.1%, far outpacing any other household expense,” she said. “No other cost category has risen as steeply or as consistently over the past two decades. Outpatient facility care saw the largest increase of any category, rising 286% since 2005, reflecting the growing complexity of procedures now handled outside of inpatient settings.”