Measuring Total Healthcare Expenditures
Did you Know?
In healthcare, as in most things, “you can’t improve what you don’t measure!”
We know that we need more affordable healthcare - almost 70% of people in New Hampshire reported delaying or going without healthcare in the last 12 months due to the cost. We also know that New Hampshire has no statewide healthcare affordability measure. Nobody transparently tracks what we collectively spend on healthcare and what we spend it on.
This year, for the first time New Hampshire is proposing to measure the state’s total healthcare expenditures to begin tracking our spending growth. This information will help guide interventions to improve the affordability and sustainability of healthcare in the Granite State.
Here is the latest
What Do We Know About Rising Healthcare Costs?
We know healthcare costs, insurance premiums and deductibles are rising at a burdensome rate, creating an affordability crisis in New Hampshire. In a small and aging state, our businesses, people and municipalities can only spend so much on healthcare before it crowds out other necessary spending.
According to the New Hampshire Insurance Department’s most recent Report of Healthcare Premium and Claim Cost Drivers, 54% of residents accessed health insurance through their employer in 2023. Large employers and their employees once again experienced significantly higher average premiums and deductibles than in the United States and the highest deductibles in New England. In addition, healthcare spending for employees in the fully-insured employer group market increased by an unsustainable 8.4%.
In a response to a survey by the Concord Chamber of Commerce in the spring of 2024, employers complained that their full-time employees could not sign up for a family plan due to the expense burden. Local employees are not choosing healthcare, they are choosing instead to fund housing, pay for daycare, put food on the table - their health is neglected due to affordability concerns.
Employers are forced to choose between paying higher premiums or shifting costs to employees through higher deductibles. New Hampshire's Large Group Market average deductible (what the employee pays out of pocket) was higher than the US average by approximately 26% in 2023. Moreover, study after study indicates that New Hampshire residents are worried about affording healthcare and in fact 71% reported having experienced at least one healthcare affordability burden in the past year.
We Don’t Know How Much We Spend on Healthcare and What We Spend It On.
So back to the beginning - we know our costs are going up but do we do not know how much we spend collectively on healthcare and what we spend it on! Tracking our total healthcare expenditures (THCE) will give us a performance measure that shows over time how much money Granite Staters spend in aggregate on healthcare services each year. THCE is calculated by adding up all costs associated with medical treatments, including hospital stays, doctor visits, prescription drugs, and other related services, across both public and private funding sources. THCE can help us figure out if our spending is affordable, sustainable and meets our needs.
As Cory King, Rhode Island’s Health Insurance Commissioner noted at the NH Insurance Department’s Annual Hearing on Premium Rates and Healthcare Cost Drivers on October 25, 2024, “Transparency lays the groundwork for action.” A cost growth target furnishes a unifying logic and key performance indicator for interventions to improve affordability. The analysis and tracking process ensures collaboration with industry, transparency for all, and good faith engagement.
What does this mean for New Hampshire?
The THCE measure “is a simple data instrument for us.” (NHID Hearing). For example, we now know New Hampshire spent $13.028 billion in 2022 on healthcare services, about $9,331 per person.1 The NH Insurance Department (NHID) plans to track our spending changes over time. With a simple data point, we can give voice to the issues and have a serious dialogue about how high healthcare costs affect families and communities, and about the solutions needed to make sure quality healthcare is affordable and remains available into the future in our state.
A simple data point will also help inform the important work of New Hampshire’s Consumer Protection Advisory Commission. If New Hampshire seeks to remain a welcoming place for families and small businesses, demonstrating our resolve to get healthcare costs under control is critical. Bringing everyone – patients, doctors, hospitals, insurance companies, lawmakers, businesses and advocacy groups – together in good faith will allow us to develop solutions that work.
Many people feel that more and consistent transparency in the healthcare system is necessary. Developing a meaningful way to measure our spending is an important next step so all those involved in the healthcare delivery and payment system can collaborate to ensure a healthy and sustainable future for New Hampshire.
Lucy Hodder, lucy.hodder@unh.law.edu
