What's moderating costs?: Dr. David Levy discusses factors moderating medical cost trend, including information technology, increased consumer cost-sharing in health plans, and a shift to a patient-centric business model with increased focus on personal technologies. David Levy, MD, Principal, Global Health Practice Leader, PwC
Growth in health care spending in the United States has slowed considerably since 2009. PwC's Health Research Institute projects medical costs will increase 7.5% for 2013, the fourth year in a row of relatively flat growth.
Our research indicates that four forces will continue to slow the rise in medical cost trend in 2013, or act as "deflators":
Medical supply and equipment costs are abating under market pressure
New delivery methods for primary care gain popularity
Price transparency exerts downward pressure
The pharmaceutical patent cliff continues to increase use of cost saving generic drugs
Two factors will nudge medical cost trend upward next year, or act as "inflators":
Uptick in patient utilization is expected to rise as economy strengthens
Medical advances are driving growth in high-cost care and catastrophic claims
About the study
In estimating the medical cost trend for 2013, HRI relied on PwC's 2012 Touchstone Employer Survey of 1,400 employers from 34 industries. In addition, the research included interviews with health plans and industry leaders. According to PwC's Touchstone survey, more than half intend to increase employee share of health benefit cost and expand health and wellness programs in 2013.