Is Health Care Spending Declining In America?

Posted on | May 31, 2012 | Comments Off on Is Health Care Spending Declining In America?

Mike Magee

Election aside, the data is now coming in on our heath care economy for 2012. According to a recent report by the Health Care division at Pricewaterhouse Coopers, our health care spending will grow by 7.5 percent next year. This is a slower rate of medical growth than in the recent past. Credit goes apparently to the sluggish economy, the increased focus on cost containment by the industry, and patient focus on lower use of services.

US employers, of course, are following these trends closely. Next year’s increases are expected to be about 5.5 percent. Two primary strategies have emerged to control medical costs in 2013: 1) Increase the employee share of costs. 2) Expand health and wellness programs. Expect an increase in in-network deductibles, emergency room co-payments and prescription drug co-payments.

Bootom line:

• 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.

• 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 % (from 34.2 % in 2010.)

• 72 percent offer wellness programs, and half of those say they are considering expanding those programs next year.

What’s the take away? As health care becomes entrenched as a human right for all Americans, expect the emphasis on individual and family responsibility to be more clearly defined – and reinforced by financial incentives.

For Health Commentary, I’m Mike Magee