A colleague shared an article from PriceWaterhouseCooper (PWC) that projects a medical inflation dip this year!
Could you have predicted that?
They shared four (4) factors that they expect will deflate medical costs, two (2) factors that they expect will inflate medical costs, and what this all means for the employer.
Let’s see if I can summarize the article for you (if you’d rather watch their video, you can find it below the summary):
Let’s start with the 4 factors PWC expects will deflate medical costs:
- Healthcare is moving from expensive hospitals to more affordable clinics, partly because patients prefer the convenience and the decreased cost, sometimes paying as little as 1/3 the cost in a more traditional setting;
- Some big employers (they named Walmart, Boeing and Lowe’s) are now contracting directly with their big-name healthcare counterparts for the more complicated procedures (PWC noted heart surgery and spinal fusion);
- With the new Affordable Care Act (ACA) rules, hospitals are facing stiff readmission penalties when a patient returns to their facility within a “too short” a time frame. PWC estimated those penalties could be up to 30%; and
- An increasing number of employers are only offering high deductible health insurance plans, arguing that “When consumers pay more for their healthcare, they often make more cost-conscious choices.”
Ok, now here are the 2 factors PWC expects will inflate medical costs this year:
- They are expecting patients to use less generic medications, which are generally cheaper, because more patients will be using expensive biologics that “target complex cases such as cancer.” That probably falls under the good news/bad news umbrella for patients, right?
- PWC is expecting “health industry consolidation” to continue. If history is any indicator, this means that hospital mergers will continue to mean price increases of as much as 20.3%. Ouch!
Here’s that video I promised you:
Here’s what we want to know: what trends are you seeing? Does your experience “jive” with PWC’s predictions?
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