Buck Consultants is not one of the biggest benefit consulting firms, but does a lot of work with mid-size and other employers and routinely gives us insight into what is happening with their health plans, including a recent survey on current medical trends. (Buck Survey) 110 health plans or administrators, with over 100 million covered lives, responded to the survey. The headline numbers for medical trend expectations for 2019 are 7.5% for PPO designs, 7.7% for HMO ones and 7.4% for high deductible plans. Note that all these are before any design changes are made and don’t include prescription drug trend. That drug trend was separately estimated by respondents to be 10% for only health plans, but 5.7% by PBMs. Hmmm, wonder if that difference might be the profit margin for PBMs! Ancillary coverages like dental and vision are projected to have a lower trend. These projected trends are slightly lower than those estimated last year for 2018, but still well above inflation. Factors cited by respondents and Buck include hospital consolidation, utilization increases, cost-shifting from government programs and new technologies. In the case of medications, two strong trends are somewhat offsetting each other. On the one hand, increased use of generics and aggressive utilization management reduces spending; but on the other side, extensive marketing and direct-to-consumer campaigns and expensive new products, especially for cancer treatment, are raising costs. Some of the new costs show up on the medical side, as many of the new drugs are administered intravenously or by injection. While long-term charts reflect a steady decline from trend growth a decade ago, the rate of increase has plateaued for the last few years and remains quite high. The pain continues.
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
Subscribe to Blog via Email
As is usually the case in health care, the big just keep getting bigger. UnitedHealth Group’s Optum division is buying NaviHealth, which helps manage post-acute care for Medicare Advantage members.
May 20, 2020
Stellar Health shines as it raises $10 million in new financing for its business of aiding providers and payers in doing value-based care.
May 14, 2020
Another typical post. For new readers, this blog usually is all health care business, policy, and research and one staple is me making fun of the ridiculous names people put...
May 7, 2020
MedPAC 2019 Report to Congress
June 18, 2019