Healthcare costs set to rise in 2022, with costs lingering from pandemic, new report says

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CLEVELAND, Ohio – The long tail of the COVID-19 pandemic will likely lead to higher health care costs for consumers and insurance companies next year, according to a new report from Price Waterhouse Cooper’s Health Research Institute.

Subtracting the effects of the pandemic on health spending in 2019 and 2020, the institute predicts a 6.5% increase in total spending next year. This exceeds the annual increases which had ranged from 5.5% to 5.7% before the pandemic from 2017 to 2019.

Among the culprits of the expected increase next year:

  • Rescheduling of postponed medical appointments during the pandemic.
  • Increase in mental health problems.
  • An overall decline in the health of Americans linked to lifestyle changes during the pandemic.

Price Waterhouse Cooper’s annual report predicts a 6.5% increase in healthcare spending next year. This is lower than the projection of 7% for 2021, but higher than 6% for 2020, and higher than 5.7%, 5%% and 5.5% in the years leading up to the pandemic.

The additional costs will be borne by employer-sponsored health insurance and consumers, but healthcare innovation that saves money could help reduce the burden, said Trine Tsouderos , head of the regulatory center at the Health Research Institute.

“There are a lot of different things employers and insurance companies can do to mitigate this increase in costs, so it depends on your own employer and your insurance company, and how they decide how many this 6.5% belongs to all of us. Said Tsouderos.

Price Waterhouse Cooper’s Health Research Institute projects growth in employee costs or medical expenses each year over the coming year and identifies key trend drivers.

The resulting report, titled “Trend in Medical Costs: Behind the Numbers,” examined not only healthcare prices, but also the cost of healthcare services, procedures and prescription drugs, Tsouderos explained. . The report focuses on employer-sponsored health insurance, not Medicare or Medicaid.

The report grouped these costs into what it calls the medical cost trend, defined as the projected percentage increase in the cost of treating patients from year to year, assuming health insurance benefits remain the same.

Insurance companies can use the projection to help calculate premiums for health insurance plans for the coming year. The trend in medical costs projected in the report applies to employer-sponsored insurance, but not to individual coverage purchased on Affordable Care Act scholarships, Price Waterhouse Cooper mentionned.

Actual premiums will vary by region and state, industry and even the individual employer. When those bonuses are set also varies, the company said. Some employers have already set their premiums for 2022, while others will finalize them over the summer and early fall.

Typically, expenditure data from the previous year is used as input data in the projection. For 2021 and 2022, the trend in medical costs is the projected percentage increase over the previous year’s spending, with the effects of the pandemic removed from the previous year’s spending.

Employer health spending in 2020 was lower than expected, largely because people skipped routine care and elective surgery due to the COVID-19 pandemic.

The Price Waterhouse Cooper survey is based on interviews with 31 health benefits experts and health insurance plan actuaries; 450 employers in 35 industries; 1,362 physicians, physician assistants, nurse practitioners and other health care providers; and 2,511 American adults.

“Because we have this kind of very broad vision, we can say a lot, year after year, about changes in the health system,” Tsouderos said.

The Price Waterhouse Cooper report also identified gene therapies and cybersecurity among trends that may or may not increase healthcare costs in the future. Other trends, such as consumers buying care and telehealth, should help control health care costs, as they allow health systems to provide more care at lower cost, according to the report.

Here’s a look at some of the trends that are expected to affect medical costs in 2022, according to the Price Waterhouse Cooper survey:

Deferred care during the pandemic is coming back: Even when doctors and dentists’ offices reopened in 2020, many people still felt uncomfortable returning for routine health care.

Skipped wellness visits will not be caught up, so this type of deferred care will not impact healthcare spending in 2022, she said. But an increase in the number of elective procedures is expected to increase the trend in medical costs for 2022. Delaying care also leads to cancers and chronic diseases that are discovered later, leading to more expense and worse outcomes, Tsouderos said.

Costs related to COVID-19 are likely to persist: The large number of Americans who have had severe cases of COVID-19 and now have long-term health issues will increase health care costs, in addition to the ongoing costs of COVID-19 testing and administration vaccine.

Increased demand for mental health services: Multiple national surveys have shown that the pandemic has increased depression, anxiety and substance abuse, leading to higher health care costs.

“The demand for mental health services is increasing dramatically, and our research shows that we should expect not only to increase the trend in medical costs for next year, but also to continue in the future,” Tsouderos said. “There’ll be a long tail on that one for sure.”

The health of the population deteriorated during the pandemic: Increased smoking and drug addiction, along with less exercise and poor eating habits, can lead to deterioration in the health of Americans and increased health care spending, according to the survey.

Prepare for the next pandemic: Hospital systems prepare for the next pandemic or natural disaster by investing in personnel, PPE, forecasting tools, supply chain and infrastructure changes.

“They invest in forecasting (and) scenario planning, so they can understand, the next time a disruption occurs, what to do and put systems in place so they can quickly correct. these shortages, ”she said. “We’re going to see these investments very likely reflected in the prices (of health care), because all of these costs have to be absorbed by the system in one way or another.”

The growing number of gene therapies makes it a health trend to watch out for in the future, according to the survey. On average, insurance covers a larger portion of prescription drug expenses than a decade ago, while drug costs paid by consumers have remained about the same in recent years.

“I think a lot of insurers and employers are looking at the pipeline of these (gene therapies) and wondering what it will mean for us and how these will be paid,” Tsouderos said. “This remains an open question that has not been actually resolved.”

Hospitals and other healthcare organizations tend to be the target of ransomware, resulting in cybersecurity spending, she said.

“There are always year-to-year investments in cybersecurity, and those costs are built into medical cost trends,” Tsouderos said.


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