Thought Leadership

This year’s report from PwC’s Health Research Institute finds that the medical cost trend is expected to increase from 8% in 2011 to 8.5% in 2012. An interesting blend of reactions to the recession, the slow recovery, health reform, and other variables are factored into the medical cost trend in 2012. The report shares key findings, which includes an explanation of trends contributing to rising costs (accelerators) as well as decreasing cost trends (deflators).

Key accelerators:

• Provider consolidation continues
• Cost-shifting from Medicare and Medicaid increases
• Post-recession stress builds up on workforce

Key deflators:

• Blockbuster brand name drugs go off patent
• Tiering on out-of-network providers is put in place
• High-deductible plans force more cost-sharing