Tame medical inflation expected to roar ahead in coming decade

Health care expenditures for Minnesota residents grew at a historically slow pace of 1.9 percent in 2016. That was one of the lowest growth rates in years according to a report from the Minnesota health department.

Taxpayers were the biggest beneficiaries. Reductions in spending on public health insurance programs like Medical Assistance were a leading factor in reigning in the cost of care.

But the aging population and price inflation for medical goods and services are forecast to double health spending in Minnesota over a decade — a scenario the department brands as "potentially unsustainable."

Minnesota needs continued innovation in public policy and marketplace efforts to limit spending increases, said health commissioner Jan Malcolm in a statement.

"And above all, a sharpened focus on preventing disease," she said. "It's far less expensive to prevent diabetes, cancer and other chronic diseases than it is to treat them after they have developed."

The report also highlights "the rapid increase in out-of-pocket spending for people with private coverage."

That trend is obscured by the low overall increase in spending on health care, said state health economist Stefan Gildemeister.

"Out-of-pocket spending in the state, which includes spending on deductibles, copayments and other forms of cost-sharing, grew at double the rate of total spending between 2002 and 2016," he said in the department's statement. "For many Minnesotans, that is causing very real pain."

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