August 26, 2014: Vermonters with employer sponsored health insurance spent less on health care but their spending grew faster than the national average in the years before implementation of the state’s health reform law, says a new study from the Health Care Cost Institute (HCCI) prepared in cooperation with the Green Mountain Care Board (GMCB).

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Vermonters Spent Less on Health Care, While Spending Grew
Faster Than National Average in 2007-2011


Report compares employer insured Vermonters to the Nation

Washington, D.C. –Vermonters with employer sponsored health insurance spent less on health care but their spending grew faster than the national average in the years before implementation of the state’s health reform law, says a new study from the Health Care Cost Institute (HCCI) prepared in cooperation with the Green Mountain Care Board (GMCB). The2007-2011 Vermont Health Care Cost and Utilization Report, is the first report by HCCI comparing national and state health care trends for the privately insured.

The study examined health care spending and utilization trends of Vermonters younger than age 65 with employer sponsored insurance (ESI). Between 2007 and 2011, per capita spending in Vermont was lower than the ESI national average yet annual spending per Vermonter with ESI grew faster than the national average.

Medical and prescription spending, combined, was about $4,408 per employer-covered Vermonter compared to $4,520 nationally in 2011.  Also in that year, Vermonters spent about $138 less on their health care out of pocket compared to the average American with ESI.

“This report shines a light on five years of health care trends for people with employer insurance in a reform-minded state,” says Carolina Herrera, HCCI’s director of research. “Up until now, there has been a great deal of attention paid to national health spending.  Vermont, and other states, want and need analyses like this to better understand what is changing within their state and for their citizens as they move forward with health reform.”

HCCI examined the data from an average of 305,000 Vermonters per year with employer-sponsored insurance between 2007 and 2011. The research team compared Vermont health care costs, utilization, and prices to HCCI’s national data on 40 million Americans covered by employer-sponsored health insurance. The report is based on data from the Vermont Healthcare Claims Uniform Reporting and Evaluation System (VHCURES) and the HCCI national claims database. In a benchmarking project designed to provide Vermont with a baseline comparison on expenditures, Vermont granted HCCI permission to use the VHCURES data alongside HCCI’s national claims database. The data provided to HCCI for this study does not include any information identifying individuals, employers, and insured groups.

“HCCI’s work has established a baseline to help track changes in health spending in Vermont compared with the rest of the nation,” said Dian Kahn, the GMCB’s director of analysis and data management and VHCURES program director. “This is important to our work in Vermont because we need solid comparative data to track the impacts of changes and to gain a deeper understanding of how factors such as health status, age, prices, and availability of services influence trends in spending. We are grateful to HCCI for their rigor in evaluating, standardizing, and analyzing our state’s claims data in a way that we believe will increase accountability and transparency in our efforts going forward.”

The study also looked at trends in young adult spending, hospital and outpatient spending, as well as spending on prescription drugs, imaging and radiology. Highlights include:

  • Gender Differences in Spending.  On average, women paid for a larger share of their health care bills out-of-pocket than men in Vermont. This difference widened between 2007 and 2011. In 2011, women with ESI paid $669, while men paid $517.
  • Young Adult Spending. In most years of the study, Vermonter young adults (ages 19-25) spent more on health care than the national average for young adults with ESI. Young adult Vermonters with ESI also paid a greater portion of their health care spending out-of-pocket, compared to most other Vermonters with employer coverage.
  • Hospital Spending.  Spending for inpatient care and outpatient visits in Vermont comprised 33 percent of health care spending for Vermonters with ESI, compared to 38 percent nationally. Vermonters with ESI spent less on inpatient admissions than their national counterparts ($663 and $950, respectively in 2011). Although they had much shorter hospital stays, Vermonters with ESI had a much higher use of outpatient facility care.

Beyond the significance of the substantive findings, this study demonstrates the value of a standardized approach to national and state-level reporting and HCCI’s ability to assist states wanting to monitor or influence prices or utilization within their borders,” said HCCI Executive Director, David Newman. “As the first national Qualified Entity, HCCI will be expanding our mission to help states by incorporating Medicare and quality benchmarks in future reporting.”

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About the Health Care Cost Institute
The Health Care Cost Institute promotes independent, nonpartisan research and analysis on US health care spending. HCCI believes a better understanding of the forces driving health care cost growth will help policy makers, researchers, and the public make decisions that will lead to more accessible and affordable care. HCCI is governed by an independent board that includes distinguished economists, actuaries and health care experts. For more information, visit www.healthcostinstitute.org or follow us on Twitter @healthcostinst

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