Rochester reacts: Medical costs have risen faster than any other cost area

ROCHESTER — Annette Mueller said her life is often dictated by her medical bills. It can dictate if she and her husband need to scale back their vacations. If they need to cut back on food expenses. If they can afford to retire.

The answer to the retirement question, at least for now, is no.

Mueller, 60, has a degenerative joint disease that has required several surgeries and expensive drugs to treat. She and her husband, both Rochester residents, have had to make significant cuts to meet their recurring medical bills, even dipping into their retirement savings, and her husband has had to stall his retirement to keep ahead of the mounting debt.

Mueller, a day care provider, knows her roster of monthly medical bills well. She spends $520 each month toward her surgery bill debt, $918 on insurance (her husband spends $500, since he’s eligible for Medicare because of his age), $750 on the drug Humira, and approximately $100 on general medicines.

That’s not to mention the $9,100 out of pocket she spends each year before her health insurance coverage fully kicks in. Just the monthly costs alone exceed her $2,200 monthly house payment by more than a thousand dollars.

“It gets really tiring having these over your head,” Mueller said. “It’s very very stressful.”

A Post Bulletin analysis of the Bureau of Labor Statistics’ Consumer Price Index found that, since 2000, Minnesota medical care costs have increased faster than any other cost area, from rent prices to household utilities. Medical care costs increased by 151% from 2000 to 2022, overtaking the overall inflation rate of 68% and wages, which only increased by 106%.

Within the medical care category, hospital costs increased the fastest, by 251% — faster than areas like dental care, nursing homes and medical supplies.

Denise Robertson said she sees proof of the rising medical costs every day in her work. She’s been a Health Access MN navigator in Rochester for 10 years, part of the statewide network of MNsure-certified experts trained to help Minnesotans enroll in and maintain health insurance coverage.

“Each cost increase is layered on top of another,” she said. “Not only are the health insurance premiums higher, but the deductibles get higher and the out-of-pocket maximums get higher and higher, the copay goes up and the coinsurance percentage goes up. You want to know how it impacts consumers? Add that all up.”

Marilyn Schiller, 71, has witnessed these changes for herself. Schiller, a Rochester resident and psychologist, said that over the past 20 years, she’s watched the price of everything from health insurance to drugs to dental care inch up. She’s been fortunate to be able to fit medical costs into her budget, but she said she’s frustrated that health care is often posited as a financial choice.

“One can choose to buy a new piece of furniture,” Schiller said. “The choice to buy hearing aids is not really a choice.”

Traci Westcott / Post Bulletin

Robertson said that as she and her colleagues have watched Minnesota medical costs increase, they’ve sought answers. However, the answers are complex and indefinite. She said the rapid increases could be due to everything from COVID-19 pandemic expenses and increased demand to treating an aging population, to corporate greed within the hospital and pharmaceutical industries.

Other answers abound.

The Minnesota Hospital Association said in an email that medical care costs have increased at a faster pace than overall inflation due to the specialized resources it takes to care for patients, namely the workforce.

Madde Renneke, MHA spokesperson, explained that with Minnesota hospitals, the workforce comprises 52% of the annual expenses. This is because health care workers are typically highly educated and specialized, which requires higher salaries, and because staffing costs have fluctuated due to workforce shortages. She said that when hospitals need to bring in contracted staff, for example, these costs can triple or quadruple the normal wage level of permanent staff.

On the non-labor side of expenses, Renneke said that some of the high costs stem from the required use of sophisticated, high-tech medical equipment and supplies. She also noted that one of the fastest growing costs for any health system is the cost of medications and drugs, which she said is due to pharmaceutical companies continually increasing costs at exponential rates.

However, Renneke said that innovations to bring down costs are on their way.

“The health care system is moving along a journey towards value-based care,” she said. “This is incentivizing more outreach to patients to prevent unnecessary hospitalizations by ensuring their resource needs are being met, such as access and adherence to medications, annual wellness visits, and other health promotion tactics.”

As medical costs climb, some Minnesotans are forced to forgo medical care in order to keep on top of their bills.

This was the case with Nicole Diercks. Diercks, a preschool teacher in Stewartville, has a rare disease that causes abnormal bone growth. She has been to countless doctors, including an eye specialist, for expensive visits and tests over the past 12 years.

Diercks is supposed to see her eye specialist each year, but the costs can feel prohibitive. She’s sent home with a $2,600 bill after her annual appointment, which often includes three hours of intensive testing. Even a quick checkup with her doctor is $300. This year, when her appointment time came around, Diercks said that since her eyes felt OK, she decided to skip the appointment because of the costs.

Diercks says she is often forced to make calculations like this about her health.

“For someone who’s dealing with a chronic illness, it’s really hard on the pocketbook,” she said. “And then trying to make sure you can afford treatment for it — it’s an additional burden to bear on top of the disease. That’s what makes me a little angry.”

Contributed / Denise Robertson

Diercks is not alone. Robertson said that she frequently sees her clients going without or rationing prescription medicines, or forgoing care in the face of escalating medical costs. Some also don't enroll in health insurance or drop it because of unaffordable premiums. However, forgoing health insurance also leaves them vulnerable to medical debt.

Forgoing care can have long-term financial and health consequences for the patients, but also for the health system.

“Some patients won’t go to the doctor early on because of high out-of-pocket costs,” Robertson said. “Only if they’re desperate and can't take it anymore. In the long run, the health care system ends up paying a much higher price, because if patients had been able to afford to go in earlier, they could have addressed some of these health issues before they turned into expensive emergencies or chronic issues.”

Although medical care can be expensive for many Minnesotans, Robertson said there are options available to access care at a lower cost.

For example, patients can visit lower cost and free health providers in Rochester, such as the Salvation Army’s Good Samaritan Health Clinic , Community Dental Care or Community Health Service Inc .

If a patient needs to go to a hospital, Robertson recommends that patients look into payment plans and charity care. Charity care is financial assistance that hospitals provide to patients based on income and other financial factors. Depending on a patient’s assets, patients could qualify for discounted or even free care.

At Mayo Clinic, for example, patients could be eligible if their household income is less than 400% of the federal poverty guidelines. That means that a single person could qualify if they make less than $58,320 and a family of five could qualify if they make less than $140,560.

There are also free resources and financial counseling available through nonprofits like Lutheran Social Services , and patients can, of course, contact Robertson and other Minnesota Navigators who can connect them with the right services, free of charge.

“What patients shouldn’t do is do nothing,” she said. “We understand why people do it, of course, but patients should try not to forgo insurance coverage and medical care, especially preventative care, because it’s going to catch up with them at some point at a much greater cost than it would have if they had addressed it earlier.”