Health care costs continue to rise at unsustainable rate
A new report projecting 2018 health care cost trends contains both good news and bad news for U.S. consumers. The good news: Double-digit percentage increases in health care costs have subsided.
The bad news: Costs are still expected to rise by 6.5 percent in 2018. That’s higher than the Consumer Price Index, which is projected to grow 2.6 percent next year.
The PwC Health Research Institute, which analyzes health industry trends, annually projects the growth of medical costs within the employer insurance market (not Medicare, Medicaid or Health Exchanges).
A newly released report for 2018 finds:
- Rising overall inflation affects health care, driving up wages and medical prices.
- Employers’ efforts to shift some costs to employees through high-deductible cost plans have eased off. While that may be good news for some employees, the cost-shift has also resulted in fewer people using medical services, which has kept prices down.
- Fewer name-brand drugs will come off patent. That means fewer chances to buy cost-saving generics.
- Drug prices remain under intense political and public scrutiny. That could slow rising prices.
- Hospital spending will likely account for half of all medical costs. Physicians will account for 29 percent and prescription drugs 18 percent.
The bottom line:
Health care costs will continue to take a greater share of the overall economy, outpacing wages and inflation. PwC analysts say the trend simply isn’t sustainable.
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