The U.S. is slated to enter a period of medical cost equilibrium, where the forces that drive up health costs are offset by a demand for value-based health care system, according to a report released to The Daily Caller News Foundation Tuesday morning by PriceWaterhouseCoopers Health Research Institute (PwC).
PwC projects the medical cost trend to be 6.5 percent in 2017, a growth rate nearly half that of 2007.
A medical cost trend is the projected percentage point increase in the cost of treating a given patient from one year to the next. The data is incredibly valuable for players in the medical field, as it allows them to anticipate the costs of doing business from year to year. Insurance companies, for example, use medical cost trends to forecast premium increases for the future.
“Single-digit growth is the now the new normal,” PwC Health Research Institute leader Ben Isgur told TheDCNF. “No longer will we see huge fluctuations.”
While the news may appear to give cause for celebration, “it is not time to declare victory,” Isgur told TheDCNF. The growth rate for medical costs still outpaces general inflation and wage growth. Essentially, consumers pay higher and higher costs for the premiums on their employer-based health plans, which offsets their marginal increase in wages.
“The private sectors has continuously focused on the utilization aspect of health care, but it is time to start focusing on price,” Isgur told TheDCNF.
Isgur noted that consumers who get insurance through their employers should spend some time carefully analyzing each option and stay alerted of any changes to employee health benefits that arise in Fall 2017. He also thinks companies should spend more time teaching their employees about the various health options they provide, which could help lower costs in the long-run for both employees and the employer.
Researchers at PwC’s Health Research Institute interviewed health executives, health care policy experts and health plan actuaries who work for companies representing 100 million individuals. The firm also analyzed data from 2007 to 2016 to come up with its current 2017 projection.
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