My family's $2,000 popsicle and why health care costs so much in Colorado

This is a story about a $2,000 popsicle and also about a question that is harder to answer than it seems it should be: How much are health care costs increasing in Colorado?

By almost any measure, health care is becoming more expensive, in some cases by a lot. For instance, payments by patients and health insurers in Colorado for prescription drugs increased 97% between 2013 and 2020, according to the Denver-based Center for Improving Value in Health Care.

Overall, health care payments in 2020 averaged $7,200 per person, a 27% increase from 2013. The portion of that actually paid by patients — what is known as out-of-pocket costs — was $870 per person for folks with commercial insurance, a 22% increase from 2013.

But this isn't the only narrative about rising health care costs in Colorado, because "health care" is not a single product or even a single system. What you pay for it rests on thousands of individual circumstances and decisions — some of which you can control to help mitigate what you pay and some of which you can't. How those combine together determine whether health care is actually more expensive for you.

"There's so many moving parts to the health care industry," said Priya Telang, the communications manager for the Colorado Consumer Health Initiative.

And this brings us back to that pricey popsicle.

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An ER visit and a $2,110 bill

In 2021, my daughter, then 2 years old, came down with a fever. A bad one.

The thermometer hit 103, then climbed to 104 and above. Tylenol did little to slow it down. My wife tried to make a same-day appointment with the pediatrician, only to be told there were no slots available. Urgent care wasn't an option because there was no guarantee of being seen by a pediatric specialist.

So, at a nurse's urging, off to a nearby pediatric-specific hospital emergency department we went.

At the ER, a nurse hooked my daughter up to the usual machines. The doctor checked her over without much alarm.

They gave her some Motrin and told us to start rotating it with the Tylenol every three hours. They administered a test for a urinary tract infection. (Negative.) They gave her a Zofran as a precaution for nausea. And they brought her a Bomb Pop.

It was the last medicine that seemed to help the most — a delighted smile emerging on her sullen face because she had not heretofore known that doctors can prescribe popsicles. After an hour or so, the fever subsided to less-alarming levels and we were discharged, no diagnosis in hand. (It later revealed itself as roseola, a common childhood viral infection.)

A few weeks later, the bills arrived:

$2,110, plus another $82.80 for the doctor,

who worked for a different company than the hospital.

Amazed but not surprised, my wife and I laughed at the bill. How could a couple very common medications plus a routine test cost that much? As a health journalist, I knew the answer: The bill was so hefty because of the hospital facility fee, which hits especially hard in an ER visit. But, embracing the dark humor of the situation, we settled on a different answer.

And thus in our house was born The Legend of the $2,000 Popsicle.

Falling into the high-cost funnel

If you have a pulse in America, you probably have a similar story of a ridiculously expensive medical bill.

In our case, the bill stung but was not financially fatal — we had enough in a health savings account to cover it. Not everyone in Colorado is so fortunate, though. In 2021, 11.3% of people surveyed in the large Colorado Health Access Survey reported difficulty paying a medical bill.

But our experience in the ER does illustrate how easy it can be for health care expenses to balloon beyond your control.

We knew that the ER is the most expensive place you can receive care. But our efforts to avoid going there hit up against a brick wall of availability, and this is not uncommon.

Average spending on health care per person in 2021

Per-person figures are not what an average person spent out-of-pocket on health care in 2021. They represent a per capita calculation for all spending, both by individuals and insurance companies.

Source: Center for Improving Value in Health Care

The Colorado Health Access Survey found that nearly 19% of people in 2021 reported not being able to make a primary care appointment as soon as was necessary. This lack of access funneled us into more expensive care.

Once there, our choice to enroll in a bronze-tier health insurance plan — one with a lower monthly premium but a higher deductible — left us exposed to paying the full cost of the visit. And this, too, is an increasingly common situation.

As insurance costs have risen, more and more individuals and families who receive insurance through their work have chosen to drop into this lower-up-front-cost coverage, which are formally known as high-deductible health plans. In 2009, the federal Bureau of Labor Statistics found that 15% of workers nationwide were enrolled in high-deductible plans. By 2018, that percentage had climbed to 45%.

These plans provide coverage against catastrophic health expenses, but for smaller bills — say, a fairly uneventful ER visit — the burden falls solely on the patient to pay until they have spent enough to hit their annual deductible. That can mean spending many thousands of dollars before insurance kicks in anything.

This creates a new affordability crisis in health care. People with high-deductible plans are less likely to seek medical care. They are more likely to be hit with bills they can't afford. And these high-deductible plans have become a big driver of medical debt for patients and uncompensated care for hospitals.

In 2021, an estimated 12.3% of people in Colorado skipped needed primary care because of the cost, according to the Colorado Health Access Survey, which is conducted every other year by the nonpartisan Colorado Health Institute. (Data for the 2023 survey should be available in February.)

Of those who reported difficulty paying medical bills, more than half took on credit or credit card debt, and more than a third said their medical bill meant they struggled to pay for food, heat or rent.

Average spending per person by Division of Insurance region in 2021

Once again, per-person figures are not what an average person spent out-of-pocket on health care in 2021. They represent a per capita calculation for all spending, both by individuals and insurance companies.

Source: Center for Improving Value in Health Care

The insight from the invoices

None of this really answers the question: How much more expensive has health care become in Colorado?

There's a good amount of data on this because the aforementioned Center for Improving Value in Health Care maintains what is known as an all-payer claims database for Colorado — that is, it oversees a massive collection of medical bills that can be used to estimate health care spending in the state.

Between 2013 and 2020, the per capita amount paid to doctors and other medical providers increased by 27% in Colorado. The per capita amount paid for outpatient services increased by 33%. Both of those are roughly in line with or slightly above inflation for those years.

It should be noted that the 2020 cutoff — it's the most recent year for which CIVHC has complete data — was before recent periods of rapid inflation. There's evidence nationally, though, that health care costs rose more slowly than overall inflation in recent years.

One area, the per capita amount paid to hospitals for inpatient services, decreased by 9% between 2013 and 2020, in line with hospital efforts to treat more people in outpatient clinics.

But, of course, for most people, the pain of health care costs are filtered through — and sometimes lessened by — insurance or other forms of coverage. And here there are some bright spots.

Share of spending in 2021

Doctors' fees and outpatient visits made up the majority of health care spending in 2021, followed by prescription drug costs. Payments for inpatient hospital stays is the only category where spending is decreasing — as hospitals shift more services to outpatient care.

Source: Center for Improving Value in Health Care

Colorado's rate of people without insurance hit a record low last year.

For people who buy insurance on their own, Colorado now has some of the lowest premium prices in the country. The average benchmark premium price in Colorado — a handy standardized way of looking at the cost of plans across different states — is $380 per month in Colorado. That's nearly 40% higher than it was in 2014, but it's $76 per month less than the national average.

Subsidies for those who buy insurance themselves have also increased and expanded, as have programs to help people pay out-of-pocket costs like deductibles.

These trends, part of the much broader impact of the federal Affordable Care Act, appear to be reducing the burden of health care costs on Coloradans, even as prices continue to rise.

For instance, the previously mentioned 11.3% of people who reported trouble paying a medical bill in 2021 is a major improvement over prior years. In 2009, that figure was 21.9%.

Bankruptcies due to medical debt have also fallen. In 2021, 3.1% of people in Colorado who had trouble paying a medical bill said they filed for bankruptcy as a result, according to the Colorado Health Access Survey. In 2013, the year before most of the major features of the Affordable Care Act were implemented, that percentage was 11.1%.

So where does this leave us? The United States is a clear outlier globally in having expensive health care. But that financial weight isn't carried evenly.

The best you can do is be smart in selecting an insurance plan, choose wisely in how and when you receive care, fight bills that you think are unfair, and learn lessons that suit your family as you go.

Here's one from mine: We buy our popsicles at the grocery store now.