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Minnesota sees slowdown in health care spending increases

Health care spending in Minnesota increased 2 percent to $38.2 billion from 2010 to 2011, according to a report recently released by the Minnesota Department of Health (MDH). The report looks at all health care spending, including private health insurance, out-of-pocket spending, state public programs and Medicare.

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This latest health care spending data reflects a trend of slowing growth in health care spending since 2007. It also indicates that in national comparisons, Minnesota continues to look competitive with regard to health care spending inflation.

In 2001, Minnesota’s growth rate was half the nation’s rate of almost 4 percent in 2011, the most recent year for which data are available.

Total spending in 2010 was $37.5 billion or a growth rate of 1.7 percent from 2009. Together with the 2 percent growth seen in 2011, these rates mark the lowest year-over-year change in health care spending since MDH began tracking this trend for Minnesota in the mid-1990s.

In addition, Minnesota’s per-person health care spending in 2011 of $7,145 was lower than the national per-person cost of $8,175. Plus, health care spending accounted for a smaller share of Minnesota’s economy, 13.6 percent, compared to the national number of 16.9 percent.

Part of the slow growth in health care spending is related to lingering effects of the recession still experienced by many Minnesotans in 2011. Minnesota’s uninsured rate remained above 9 percent in 2011.

Due to factors including unemployment and lost wealth, some Minnesotans appear to have delayed or used less health care. Higher cost sharing requirements likely exacerbated these choices.

Other possible factors slowing the growth in costs include continued increased cost sharing in the private insurance market, slower development and implementation of medical technologies, and changes in pharmaceutical drug benefit trends.

In addition, a number of reforms and private sector initiatives aimed at improving care coordination, promoting value through payment reform and investing in health information technology likely have contributed as well.