Saint Paul, MN – Health care spending in Minnesota rose by 15% from 2021 to 2022, reaching $6,813 per non-elderly adult with private insurance. A state report reveals that the primary driver was rising prices, as the use of health care services grew by less than 1% during this period.
Prescription Drug Costs Soar
Spending on prescription drugs increased by 30%, driven by a 25% rise in prices and a modest 4% growth in usage. These numbers do not yet reflect the impact of newer, high-cost medications like GLP-1 drugs for weight loss, which are expected to further inflate spending in the coming years.
Hospital Costs Also Rise
Hospital inpatient care saw a 25% price hike in 2022, attributed to higher staffing costs amid worker shortages. Despite this, hospital usage dropped nearly 19% as more patients sought treatment at outpatient clinics and surgery centers.
Breakdown of Spending
For privately insured Minnesotans, spending was distributed as follows:
- 40% on office visits and doctor fees.
- 25% on outpatient facilities and surgeries.
- 18% on prescription drugs.
- 17% on inpatient hospital care.
Efforts to Address Rising Costs
Gov. Tim Walz and state legislators have launched initiatives to tackle soaring health care costs:
- A Prescription Drug Affordability Board is reviewing drug prices and may set payment limits for state health plans.
- Minnesota is collecting data from drug manufacturers to identify excessive pricing.
- The state is exploring a single-payer system and a public option health plan to provide more affordable coverage.
These measures are in early stages, with the affordability board still hiring leadership. Minnesota has also sought bids to analyze potential cost savings under a single-payer system.
The Bigger Picture
In 2022, total health care spending in Minnesota reached $66.8 billion, compared to $4.5 trillion nationwide. While spending has fluctuated due to the pandemic, experts say rising prices remain a consistent problem.
Efforts to curb costs aim to prevent Minnesotans from delaying or avoiding necessary care, ensuring access remains affordable for all.
