A decomposition analysis of medical expenditure growth among injured workers

The factors driving the rapid increase in US medical spending are a concern for both policymakers and payers. This article analyzes variation in spending growth rates for a large sample of persons with workplace injuries. We analyze trends by type and age of injury, and by type of provider. Medical spending growth ranged from 2 percent to 12 percent for different injuries, and 3 percent to 16 percent across different types of providers. We decomposed spending growth into price, volume, and service intensity growth rates. Service intensity accounts for 20 percent of overall expenditure growth, but is a particularly large and variable contributor to spending growth in inpatient services, ranging from 35 percent to 73 percent of total spending growth among the four most prevalent injuries we studied. Efforts to forecast spending, and to design policies that manage spending growth, should account for heterogeneous trends across patients and providers.