Getting your Trinity Audio player ready...

There’s bad news and worse news when it comes to health care costs in Minnesota.

Per capita costs for private insurance patients rose 7% or more than $581 in 2022. And that comes on a 12% increase in 2021, according to an annual report by MN Community Measurement, a group that tracks health care costs in Minnesota.

Not surprisingly, much of the increase can be attributed to rising prescription drug costs. A new class of weight loss drug came to market in 2022 helping drive a 17% increase in prescription drug costs. Blue Cross Blue Shield costs alone rose 63% for this type of drug in the year ended in September.

Annual per capita costs have gone from $5,904 to $8,832 from 2014 to 2022, according to the report. Spending is measured by how much insurance companies pay and how much consumers spend out of pocket on care.

The report also suggests clinics were not as good as in the past in treating chronic diseases like diabetes and managing them for cost effectiveness. There were higher costs for emergency room use and outpatient surgeries even though primary care and hospital admissions were down.

The declines in hospital admissions may be related to staffing as the entire industry continues to deal with a shortage of nurses and other health care occupations. And emergency room use may be up because there may be a shortage in beds at rehabilitation facilities.

In addition, the cost of the same treatment varied widely depending on the insurance companies and providers. A simple X-ray cost $49 in some cases and $348 in other cases.

All of these issues point to the larger overall problem of competition in the health care marketplace. Health care providers cannot build new hospitals or care facilities without state approval. Those restrictions stem from an earlier time when hospitals were being built to excess capacity and costing the state and taxpayers money.

The state should consider removing those restrictions. Times have changed and we now have a shortage of beds, not an excess. People are taking up expensive emergency room space waiting for a bed elsewhere.

When it comes to prescription drugs, efforts initiated with the Biden administration to allow Medicare to negotiate prescription drugs prices is a step in the right direction.

The federal and state governments should also look at the role pharmacy benefit managers play in the prices of prescription drugs. Some argue the managers help keep health care costs down by negotiating with drug makers and others. At the same time independent pharmacies argue the benefit managers squeeze out competition by favoring their own pharmacies.

We believe competition is the best medicine for keeping health care costs affordable, but there appear to be very few mechanisms, private or public, that measure and encourage competition.

What we’re doing now isn’t working.

— Mankato Free Press, Nov. 30