Early Trends in Health Care Utilization in the Commercial Market

Staff portrait of Kathy Hempstead

Katherine Hempstead, PhD, MA, director and senior program officer, leads RWJF's work on health insurance coverage.

In Brief

Early data suggest that health care utilization, in general, trended downward between the first quarter of 2013 and the first quarter of 2014, but may be increasing in the individual (or non-group) market, particularly with regard to hospital care. Findings from this period show:

  • Utilization per 1,000 plan members is greater for the group market as compared to the non-group market for both ambulatory and hospital services.
  • Between 2013 and 2014, utilization of ambulatory care declined for both non-group and group markets, but more for the group market.
  • Hospital utilization increased between 2013 and 2014 in the non-group market, but declined in the group market.
  • The ratio of non-group to group utilization increased between 2013 and 2014 for all types of utilization.
  • Trends in utilization reflect compositional changes in both the non-group and group segments, as well as changes in benefit design and care management designed to reduce utilization among all populations.

There is obviously great interest in the trajectory of costs for those newly enrolled in marketplace plans. While proposed rate changes have provided some insight into carriers’ experiences, there is little to no comprehensive public information about how the utilization of health care services by the new non-group market enrollees compares to that of previous enrollees, and how the non-group segment of the commercial market compares to the group market. While this is of interest largely because of the major changes in the individual market associated with the coverage expansions of the Affordable Care Act (ACA), there are other trends which may have implications for utilization experience in the commercial market—a shift toward higher consumer cost-sharing and an increase in risk-based contracting and other types of care management, all of which are designed to reduce utilization, particularly of hospital care. At the same time, the migration of the group market to self-insured products is thought to disproportionately involve healthier groups, which would increase the average utilization experience among those populations that remain in the fully insured group market.

The National Association of Insurance Commissioners (NAIC) collects data each quarter from carriers on premiums, enrollment and utilization. A previous post described enrollment data in the non-group market and provided some caveats about the data. This post describes some of the utilization data available. Carriers are required to report in several categories: total ambulatory utilization, which is reported separately as physician and non-physician visits, hospital admissions and patient days. This information can be used to compare utilization in the group and non-group segments of the individual market, for the first quarters of 2013 and 2014.

Overall Trends Suggest Utilization May Be Declining

The data show that for both segments of the commercial market (group and non-group) ambulatory care utilization declined between Q1 2013 and Q1 2014. The decline was somewhat greater in the group market, leading to a slight increase in the median ratio of non-group to group ambulatory utilization between 2013 and 2014. With regard to hospital utilization, the gap between the non-group and group markets was greater at baseline, but while utilization declined in the group market, both patient days and admissions increased in the non-group market. The median ratio of non-group to group increased for both of these measures, while the median percent changes show a slight increase in the non-group segment versus a 6 or 7 percent decline in the group market.

Note that carriers reporting fewer than 1,000 members are not included, as is the case with several other extreme outlier data points. Median utilization is lower in the non-group as compared with the group market for all categories. This can be seen in the ratio of non-group to group utilization, which in Q1 2013 was approximately .8 for ambulatory care and closer to .7 for hospital care.

Ambulatory Care Trends Vary

There is considerable variation in utilization trends among non-group carriers. Ambulatory care utilization per 1,000 members increased for some of the large national carriers (United, Humana, WellPoint) while it decreased for Aetna and slightly for HCSC. Among the Blues, experience was also varied as increases were reported in some states (Alabama, Florida, Minnesota, and Vermont) while decreases were posted for some others (Arizona, South Carolina, and Idaho). The new entrants, many of which are cooperatives, show a large range of ambulatory care utilization.

There are large increases in ambulatory care for several of the large national carriers in the group market (United, WellPoint, Humana), which may reflect the selective migration of healthier groups to self-insured products. HCSC had a moderate decline, while Aetna’s more significant decline may reflect the acquisition of Coventry.

Trends Mixed for Hospital Use

In the non-group market, the median admissions per 1,000 members increased between 2013 and 2014 from 9.6 to 9.8, but many of the national, publicly traded corporations show decreases (Aetna, United, HCSC), although WellPoint posted an increase. Among the Blues, results are mixed, with some (Alabama, Florida, Minnesota, and Vermont) showing large increases, while others (Arizona, South Carolina, and Massachusetts) report lower hospital utilization in 2014. Independence Blue Cross, which adopted a very narrow network, showed considerable decline in hospital utilization. Molina Healthcare, which has Medicaid and QHP plans, reported an increase in hospital utilization in 2014, yet at levels which are considerably below the median. Wellcare, a privately traded company with Medicaid plans in a number of states, reported a high level of hospital utilization in 2014. Many, but not all, of the new entrants in 2014 post high levels of hospital utilization.

Data on hospital utilization in the group market provide some interesting contrasts. Hospital utilization in the group market overall declined considerably, with a median decrease in both admissions and patient days of 7 and 6 percent, respectively. A few of the national, privately held carriers show increases, such as Aetna, United, and WellPoint. For Aetna, this increase probably reflects the acquisition of Coventry. United and WellPoint had decreased enrollment in group products in 2014, so the increase in hospital utilization may reflect selective out-migration by healthier groups to self-insured products. Humana and HCSC show declines in hospital utilization.

Unlike the case with the non-group market, the majority of the Blues show declines in hospital utilization in their group populations. Since the group enrollment numbers in the Blues are not changing very much, declines in reported hospital utilization may reflect changes in care management rather than compositional changes in the covered populations. Yet despite the declines, group hospital utilization considerably exceeded that in the non-group market for most of the Blues. For BCBS of Florida, which converted to Guidewell Mutual Holding in 2014, for example, admissions per 1,000 members increased from 7.1 to 11.1 in the non-group market, while it declined from 23.1 to 21.9 in the group market.

Blues’ Clues

In some ways, the reported data from the Blue Cross Blue Shield carriers provide the most comprehensible picture of what may be happening in these markets. They provide coverage in single states, so their territory does not change over time, and they are often the dominant market players in their states. Increases in their non-group enrollment reflect their participation in the ACA marketplaces, and the relative stability in their group markets suggests there may be less outmigration to self-insured products from the Blues as compared to commercial carriers. Changes in group utilization for the Blues may then more clearly reflect the impact of new approaches to care management, whereas among publicly traded national carriers who operate in multiple markets, it is difficult to disentangle changes in population composition from changes in care management. Look at this sampling of five major Blues plans. On the non-group side, Independence and Arkansas have large increases in their individual enrollment and big declines in ambulatory and hospital utilization. Alabama, Florida, and Minnesota have smaller gains in enrollment but large increases in utilization. On the group side, all five have modest changes in membership and declines in ambulatory and hospital utilization.


In addition to the general caveats mentioned in the previous post, there are certainly some anomalies in the utilization data reported here. Some reported levels are implausibly low (e.g., Blue Cross Blue Shield of Michigan) some are extremely high (e.g., patient days per thousand reported by BCBS of Arkansas). BCBS of Tennessee has the exact same calculated measures per 1,000 members in 2013 and 2014, even though the reported raw numbers are not the same. Some carriers do not report at all, or do not report all of their products. As mentioned, the experiences of many different populations are combined in these aggregate data reported by the big carriers, so it is difficult to make inferences about particular products. The surge in ACA enrollment in March of 2014 may have resulted in lagged utilization data for some carriers.


Needless to say, this is a very early look at utilization in the commercial market in 2014, and it is too soon to come to any conclusions about what may be developing. These early data suggest, however, that utilization in general trended downward between Q1 2013 and Q1 2014, but may be increasing in the non-group market, relative to the group market, particularly with regard to hospital care.