/FROM PR NEWSWIRE
Historically Low Growth in Healthcare Spending Expected in 2013,
percent next year, according to the annual Behind the Numbers report
on medical cost trend, published today by the
Institute (HRI) of PwC US. The projection continues a pattern of
slower medical growth, a reflection of the sluggish economy, increased
focus on cost containment by the industry, lower use of services by
cost-conscious patients and efforts by employers to hold down
Medical inflation has been lower than expected for the past three
years, and recalibration of previous estimates shows a low range of 7
percent to 7.5 percent from 2010 through 2013. Historically,
healthcare spending bounces back up as the economy recovers. But, the
HRI report identifies structural changes that may temper that pattern.
A fourth year of relatively low growth suggests that the gap between
healthcare spending and overall inflation may be narrowing to a more
Medical cost trend helps insurers and large employers set premium
rates for the following year. For US employers, the net impact of next
year's increase could be as low as 5.5 percent, after accounting for
changes in benefit design by purchasers, HRI estimates.
Employers are focused on two primary strategies to control medical
costs in 2013: increasing the employee share of costs and expanding
health and wellness programs, according to the PwC 2012 Health and
survey also showed that plan design features with the most significant
changes in 2012 were a considerable increase in in-network
deductibles, emergency room co-payments and prescription drug
co-payments. Highlights include:
— Nearly six in ten employers (57 percent) are considering increasing
employee contributions to health plans.
— Half of employers are considering increasing cost-sharing through
plan design, such as higher deductibles. The average emergency room
co-pay, for example, is now
— More than half of employers are considering raising employee
prescription drug plan costs.
— Average enrollment in high deductible plans coupled with a Health
Reimbursement Account has increased to 43.2 percent in 2012 from 34.2
percent in 2010.
— Nearly three quarters of employers (72 percent) offer wellness
programs, and half of those say they are considering expanding those
programs next year.
"Slower growth in healthcare costs could be the 'new normal,'" said
seeing long-term trends that could keep cost increases in check. As
employers shift expenses to their employees, for example, these
workers are pursuing lower-cost alternatives. Even as the economy
strengthens, changes in behavior by employers and consumers may help
limit medical growth."
In Behind the Numbers, HRI explores the leading cross currents likely
to shape medical cost trend next year. One of two factors expected to
"inflate" the trend in 2013 is an uptick in the consumption of
healthcare as newly hired workers obtain coverage and patients who
postponed elective procedures feel more confident about spending.
Medical and technological advances that provide more specialized,
sophisticated and expensive treatment also are expected to push up
overall healthcare spending.
Four factors HRI expects will "deflate" the medical cost trend in 2013
are: Market pressure to reduce medical supply and equipment costs;
increased popularity of new methods to deliver primary care; increased
availability of comparative cost information; and accelerated savings
from the pharmaceutical patent cliff.
"Market forces are driving demands for better outcomes and reasonable
question is: How will the industry respond? We expect to see health
organizations create services and partnerships that engage consumers
and improve quality. It isn't just dollars spent, but value derived."
Behind the Numbers outlines the actions that employers, insurers,
providers and pharmaceutical and life sciences companies are taking
now to manage costs as well as strategies for the future. This is the
seventh annual Behind the Numbers report published by HRI.
A full copy of Medical Cost Trend: Behind the Numbers 2013 and
highlights of the 2012 Health and
available at http://www.pwc.com/us/MedicalCostTrend and at
About the Research To estimate medical cost trend, HRI conducts
research each year to identify new and relevant factors that
accelerate or reduce costs. For the 2013 medical cost trend, HRI
relied on multiple sources including interviews with health plan
actuaries, providers, health plans and employers, a review of
financial analyst reports, government spending data and other
published sources, as well as the PwC 2012 Health and Well-Being
first quarter of 2012 and contains detailed information from
approximately 1,400 companies in 34 different industries as well as
interviews with health plan actuaries and other executives whose
companies provide health insurance for 47 million American workers and
Institute provides new intelligence, perspectives, and analysis on
trends affecting health-related industries.
Institute helps executive decision makers navigate change through
primary research and collaborative exchange. Our views are shaped by a
network of professionals with executive and day-to-day experience in
the health industry. HRI research is not sponsored by businesses,
government, or other institutions.
(http://www.pwc.com/us/healthindustries) is a leading advisor to public and
private organizations across the health industries, including
healthcare providers, pharmaceuticals, health and life sciences,
payers, employers, academic institutions and non-health organizations
with significant presence in the health market.
Industries at http://twitter.com/PwCHealth.
About the PwC Network PwC firms help organizations and individuals
create the value they're looking for. We're a network of firms in 158
countries with close to 169,000 people who are committed to delivering
quality in assurance, tax and advisory services. Tell us what matters
to you and find out more by visiting us at http://www.pwc.com.
partnership. All rights reserved. PwC refers to the US member firm,
and may sometimes refer to the PwC network. Each member firm is a
separate legal entity. Please see http://www.pwc.com/structure for further
details. This content is for general information purposes only, and
should not be used as a substitute for consultation with professional
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