Proliferation of care settings to drive medical cost inflation in 2019, PwC projects
- Medical cost trend is expected to increase 6% in 2019, a new report from PwC's Health Research Institute estimates. The increase is consistent with the 5-5.7% increase range in the past five years
- The proliferation of care delivery services, megamergers and consolidation are all factors inflating the medical cost trend, defined as the projected percentage increase in the cost to treat patients from one year to the next. High-performance networks and care advocacy are projected to temper costs next year, according to the report.
- "The headline is that medical cost trend has plateaued, but that flat trend is still pretty high and above inflation," Ben Isgur, HRI director, told Healthcare Dive, adding that the costs are eating up a lot of employer benefits and employees are footing more of their healthcare bills.
The industry is working through its give-and-take cost dynamics as it restructures itself.
On one hand, the proliferation of multiple ways to access care, from primary care to retail offices as well as telemedicine have given patients more options. While these options allow patients to engage with providers at their convenience, the increased use of these services can be costly depending on benefit design.
That increase is causing employers to rethink benefit design to help keep healthcare costs down.
Employers are shifting from high deductible-low premium plans to focusing on data and healthcare prices, Isgur said.
For example, in 2014, 3% of employers were implementing performance-based networks, which tend to be more narrow, according to PwC. That percentage has increased to 11% in 2018.
While that growth may not seem impressive on first glance, Isgur said the growth rate in the past four years has doubled. "We believe high performance networks or narrow networks will be common in the healthcare landscape in the future," he said.
The percentage of employers contracting directly with providers or ACOs has also increased, from 5% to 9% in the same time period.
How this push-and-pull between access vs. utilization and its effects on costs remains to be seen. Ensuring that access and utilization are balanced properly may require patient education on the part of employers or the healthcare industry. But increasingly, employers will think about how health behavioral economics will be at play to guide patients' care utilization patterns as costs rise.
“The increased availability of care may be driving higher utilization, but the question is whether that utilization is occurring in alternative, lower-cost settings that are supplanting a higher-cost visit in the next couple of years,” Mary Grealy, president of the Healthcare Leadership Council, said in the PwC report.
- PwC's Health Research Institute Medical cost trend: Behind the numbers 2019
- Healthcare Dive Healthcare costs at 'new normal' but still outpacing wages, inflation
- Healthcare Dive 4 forces that will influence medical cost trends in 2017
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