Everyone is anxiously awaiting to see if the downturn in medical spending growth will persist. PWC’s Health Research Institute gives us one of the first predictions on 2014 medical cost trend, but limited to commercial health insurance. (PWC Report) The headline expectation is 6.5% medical cost trend, but the Institute expects benefit design changes, mostly higher deductibles and copays, to limit the employer portion of that growth to a trend of 4.5%. This compares to 2013 growth of 7.5%. Obviously if employers are only accounting for about two-thirds of the total growth, consumers will endure a spending growth in excess of 6.5%. The full implementation of the reform law introduces more uncertainty than usual into the projection. Factors that are keeping trend low include the movement of care to less expensive settings like retail clinics; direct employer contracting for some high-dollar procedures; diminished hospital readmissions (we doubt this has any impact on private health insurance costs); and, most importantly in our view, the continued shift of cost to consumers, who then are more careful about using the health system. Two factors leading to spending growth are the rise of specialty drugs and consolidation among providers, which typically leads to price increases. We note once again that even this “lower” medical cost trend is far in excess of our national economic growth and general inflation. And there should be significant concern about the ability of consumers who face these heavy cost burdens to make good decisions about what and how much health care they use. While we believe consumers do need to be economically engaged in their health care, we need to ensure that they have adequate skills and tools to make wise choices.
✅ Subscribe via Email
About this Blog
The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry. Mr. Roche is available to assist health care companies through consulting arrangements through Roche Consulting, LLC and may be reached at [email protected].
Healthy Skeptic Podcast
This is an outstanding report on total global drug spending and trends, with projections out to 2025. It helps you understand this important area of health care, which does much...
June 1, 2021
MedPAC 2019 Report to Congress
June 18, 2019
It may be investors that need the redesign. They just keep pouring money into this digital health crap despite all the losses. Redesign Health claims that it makes money by...
September 16, 2022
In truth, this seems like more money down a rathole. Google’s parent and other investors are putting a billion dollars into Google’s health arm, Verily. Apparently want to compete with...
September 12, 2022
It is like investors have learned nothing from the past two years. Even supposedly smart investors like Morgan Health, which is making a $20 million contribution to LetsGetChecked, which supposedly...
September 12, 2022
Access ACO Care Management Chronic Disease Comparative Effectiveness Consumer Directed Health Consumers Devices Disease Management Drugs EHRs Elder Care End-of-Life Care FDA Financings Genomics Government Health Care Costs Health Care Quality Health Care Reform Health Insurance Health Insurance Exchange HIT HomeCare Hospital Hospital Readmissions Legislation M&A Malpractice Meaningful Use Medicaid Medical Care Medicare Medicare Advantage Mobile Pay For Performance Pharmaceutical Physicians Providers Regulation Repealing Reform Telehealth Telemedicine Wellness and Prevention Workplace