Picture this scenario: you, the consumer, take a dollar and spend it, and you get 90 cents back. In what industry is that happening?

Here’s the financial state of healthcare in America, explained in the 2016 Health Care Cost and Utilization Report from the Health Care Cost Institute (HCCI).

We live in an era of Amazon-Primed consumers, digital couponing, and expectations of free news in front of paywalls. We are all in search of value, even as the U.S. economy continues to recover on a macroeconomic basis. But that hasn’t yet translated to many peoples’ home economics.

In this personal economic landscape, patients across the United States who have health insurance through the workplace find themselves using less health care, and spending more. Why? It’s the prices.

This isn’t the first study to point out that, “It’s the Prices, Stupid,” when it comes to health care spending growth. That was coined way back in May 2003 by Uwe Reinhardt, Gerald Anderson, and colleagues in Health Affairs. 

But this round of HCCI’s annual reports is one of the first to call out the “spend more, get less” ROI for workers enrolled in employer-sponsored health plans. HCCI calculates that spending growing each year from 2012 to 2016 was almost all attributable to healthcare price increases – especially for emergency room visits, surgical hospital admissions, and administered drugs (that is, high cost specialty drugs). Use of health services declined or stayed flat in the period.

That last line-item, prescription drugs, is the green line on the top chart, growing by 27.2% — a faster growth rate than for outpatient care, professional services, and inpatient costs.

HCCI mined commercial health claims data from four insurers (Aetna, Humana, Kaiser Permanente, and United Healthcare), covering about 39 million U.S. workers under 65 years of age.

Health Populi’s Hot Points: Spending more, and getting less is my top-line finding from this report. Out-of-pocket (OOP) spending per covered employee increased between 2012 and 2016, but peoples’ utilization of health care services fell.

The increased adoption of high-deductible health plans among employers has shifted some of the health care financial risk to employees (which you can read more about here in Health Populi – on the financial risk-shift to consumers). Peoples’ self-rationing, or choice to use fewer health care services due to cost, is a rational short-term economic response to facing higher costs (prices) for health care. What that short-term choice might do to health outcomes in the longer-term is unknown: for example, disbanding or not filling a prescription for managing a chronic condition, or avoiding seeking medical care when one feels unwell…or a mysterious lump somewhere on their body.

Deferred Care – How Tax Refunds Enable Healthcare Spending is a report released earlier this month in which the President and CEO of the JPMorgan Chase Institute said, “The reality is that many American families don’t have the cash buffer to withstand the volatility created by out-of-pocket healthcare payments, and we need to better understand the correlation between financial health and physical health.”

The second (blue) chart, from the report, shows that a patient’s personal cash-flow is a driver of out-of-pocket healthcare spending — in this case, the cash infusion of a tax refund, triggering OOP spending: consumers immediately increased their OOP spending by 60% in the week they received a tax refund, and then 20% more over the 75 days following the tax refund.

The third (orange) chart shows that the tax refund motivated consumers to visit healthcare providers (doctors and dentists) and pay outstanding hospital bills which were deferred.

Another key finding in this research is that consumers timed major medical payments to occur in months when their income and liquid assets increased.

The bottom-line here is that physical health and fiscal health are bundled for U.S. patients. JPMorgan Chase recommends that insurers, employers, providers, and financial services companies, “ensure consumers receive healthcare when they need it, rather than just when they have cash on hand to pay for it.”

Only in America.