Price increases drove 90% of a nearly 19% rise in employer health spending per person
HCCI claims data shows price increases drove 90% of the nearly 19% rise in per-person employer health spending between 2019 and 2023. That moves the cost question to price per service, and HCCI's chief executive points employers to direct provider negotiation.
The Board Room · Leadership desk
Key figures: $959 of the per-person spending increase from 2019 to 2023 came from rising prices; utilization, the volume of care used, grew 1.8% from 2019 to 2023; gross prescription drug prices rose 33% over the study period, the sharpest of any service category.
| Figure | Value | Note | Claim |
|---|---|---|---|
| Per-person spending rise from prices, 2019-2023 | $959 per person | 4 | |
| Utilization growth | 1.8% 2019-2023 | 6 | |
| Gross drug price rise | 33% study period | 8 |
What happened
- Per-person spending reached $6,743 by 2023, up from $5,676 in 2019, in the Health Care Cost Institute's annual claims report.
- Utilization, the volume of care employees used, grew by just 1.8% over the same five years.
- Gross prescription drug prices rose 33%, the sharpest increase of any service category, and inpatient, outpatient and professional service prices each rose more than 10%.
- From 2022 to 2023 alone, per-person spending grew 6.5%, driven entirely by price increases while utilization was essentially flat.
- KFF's 2025 survey put employer family coverage at $26,993 a year, up 6% on 2024, and projected a further 6.5% increase for 2026.
Why it matters
- decision Utilization controls can reach at most the $109 of the $1,068 increase that price does not explain, about a tenth, so a team that puts this quarter into visit limits leaves the price component untouched.
- constraint The negotiating leverage HCCI recommends has to work against hospital systems that were buying physician practices while the outpatient price gap widened.
- cost Leaving site of care alone costs money: EBRI puts the avoidable spending across employment-based plans at $12.7 billion a year, about $101 per covered member.
The 90% share holds up against the dollar figures. Prices account for $959 of the $1,068 increase [4]. That is 89.8% [12], and it equals about 16.9% of the $5,676 per-person base in 2019 [14].
Overuse is a larger claim than the measure behind it. The report's measure is utilization, the volume of care used, and it grew too little to drive the rise [6]. In our view it cannot show whether the care already in the 2019 base was appropriate.
Katie Martin, HCCI's president and chief executive, said the pattern is not new. "In each report, we found that it's prices, not use, that drives healthcare costs," Martin said [11]. The remedy is a separate claim. "It's their negotiation, their direct negotiation with providers, that has the greatest opportunity to bring costs down," she said [3]. HCCI produced the data and its chief executive supplies the recommendation. The article reports no figures on what employers have saved by negotiating.
The data cover Americans under 65 with employer coverage, about half the US population, weighted by age, sex and geography [7]. The report was released October 13, 2026, and its latest year is 2023 [2]. A weighted national average describes the market, and in our view an employer's own claims should be checked against it before the 90% figure is applied to that plan.
Martin put the pattern on a decade scale. "The only real decline we've seen in healthcare spending over the past decade or so was the two to three months directly around COVID," she said [17]. A price program would work against a trend that has held that long, so we would judge it on price per service across several years. The nearer benchmark is the 6.5% rise that KFF projected for 2026 [10].
What to watch
- HCCI's next annual report, to see whether 2024 spending growth again traces to price rather than utilization.
- KFF's 2026 employer survey, to see whether family premiums land near the 6.5% it projected.
- Any published results from employers that negotiated directly with providers, which would test Martin's claim about where the opportunity lies.
Clarity's read
What the record supports and how the coverage leans. The claims behind it follow.
Reality
- Evidence62
- Adoption
- Insufficient
- Hype gap+10
- Incentives
- Insufficient
- Confidence58
Claim ledger
Ranked by verification strength, evidence, and original report placement.
- [1]
Rising prices accounted for 90 percent of the nearly 19 percent increase in per-person health spending from 2019 to 2023, according to Health Care Cost Institute research.
- [2]
HCCI's 2023 Health Care Cost and Utilization Report, based on claims data from 2019 through 2023, was released October 13, 2026.
- [3]
Katie Martin, HCCI president and chief executive, said: "It's their negotiation, their direct negotiation with providers, that has the greatest opportunity to bring costs down."
- [4]
Rising prices accounted for $959 of the $1,068 increase in per-person spending between 2019 and 2023.
- [5]
Per-person spending reached $6,743 at the end of the study period, up from $5,676 in 2019.
- [6]
Utilization, the volume of care employees used, grew by 1.8 percent over the five years from 2019 to 2023.
- [7]
The data covers Americans under 65 with employer-sponsored insurance, approximately half the US population, weighted to reflect the national ESI population by age, sex and geography.
- [8]
Gross prescription drug prices rose 33 percent over the study period, the sharpest increase of any service category; inpatient, outpatient and professional services prices all exceeded 10 percent growth.
- [9]
From 2022 to 2023, overall per-person spending grew 6.5 percent, driven entirely by price increases while utilization was essentially flat.
- [10]
According to KFF's 2025 Employer Health Benefits Survey, annual premiums for employer-sponsored family coverage reached $26,993 in 2025, 6 percent higher than in 2024, and KFF projected a further 6.5 percent increase for 2026.
- [11]
Martin said: "In each report, we found that it's prices, not use, that drives healthcare costs,"
- [12]
Price share of the increase is about 89.8%, consistent with the reported 90%.
- [13]
The portion of the increase not attributed to price is $109, about 10.2% of the $1,068 increase.
- [14]
The $959 price component equals about 16.9% of the 2019 per-person base of $5,676.
- [15]
The HCCI data shows the cost gap between a service delivered in a hospital outpatient department and the same service in a physician's office widened between 2019 and 2023 as hospital systems accelerated their acquisition of physician practices.
- [16]
EBRI research quantifies the site-of-care disparity at $12.7 billion in avoidable annual spending across employment-based health plans, approximately $101 per covered member per year.
- [17]
Martin said: "The only real decline we've seen in healthcare spending over the past decade or so was the two to three months directly around COVID."
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Sources
1 independent publisher whose own reporting we read for this story.
- hcamag.comYour health plan is losing the price war - and new data shows why
1 article · October 13, 2026
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Topics
- Health Care CostsFollow
- Prescription Drug PricingFollow
- Site-of-care pricingFollow
- Employer Health BenefitsFollow