Medical costs are expected remain steady in 2017, but the healthcare industry will still face mounting pressure to control costs while offering consumer-friendly services, according to a report from PwC’s Health Research Institute.
Analysts expect medical cost growth will hold steady at 6.5 percent in 2017, the same growth rate for three of the last four years. Healthcare spending has slowed substantially over the past decade thanks, in part, to the Affordable Care Act (ACA). However, that rate is still expected to exceed general economic inflation, and employers remained concerned that rates could shoot back into the double digits in the coming years.
Offering convenient care will be a sticking point for providers in 2017, which could have long term cost benefits, but requires short-term expenditures. Similarly, the growing demand for behavioral health services is likely to be a main driver in increasing costs, but greater awareness and access to care could positively impact medical costs in other areas of the industry.
PwC analysts anticipate that employers will continue utilizing high-performance narrow networks as employees rebuff high deductible plans, which will help drive down medical costs. Aggressive negotiations by pharmacy benefit managers and limited growth within the specialty drug market is expected to stem the growth of overall drug spending, particularly as PBMs and employers look to control costs through restricted drug formularies.
“It's too soon to declare victory or defeat when it comes to containing medical costs,” Barbara Gniewek, principal at PwC said in an announcement. “Stakeholders need to be ever-vigilant and keep a close eye on pricing, delivery and access changes that might impact utilization.”
- here’s the PwC report
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