Health Care Spending Factors for 2016
In a report by PWC, three factors are expected to decrease health care spending and two factors are expected to increase spending in the health care sector.
The three factors that are expected to decrease spending are, the Affordable Health Care’s “Cadillac Tax”, Virtual Care and New Health Advisers.
Set to come into effect in 2018, the tax pertains to employer-sponsored health coverage and is designed to reduce overuse of care. The 40 percent tax that is to be levied on health plans that exceed specified limits will act as incentive for employers to assess coverage based on use and need. Employers are looking at decreasing benefits through cost sharing and benefit reduction.
For years, technology has allowed remote health care, but with some new regulatory and financial adjustments, the barriers are lowered for providing tele- and virtual health care across state lines. The American Telemedicine Association estimated 800,000 primary care consults were done in 2015 with that number expected to increase greatly in 2016 based on consumer demand. This style of medicine is ideal for monitoring patients with ongoing conditions to prevent visits to urgent care and emergency rooms.
New Health Advisers
The emerging service market of the health adviser is designed to bring a more custom fit to health care plan selection. Advisers come in myriad shapes and sizes from a corporate in-house service to guide its employees to the right fit, to e-commerce sites, such as Spendwell Health, Inc. that offer up routine care services at disclosed prices, to a state-run co-op as in Kentucky’s Vitals SmartShopper.
The three factors most likely to raise health care spending in 2016 are High-Cost Specialty Drugs and Cyber Security Prevention.
High-Cost Specialty Drugs
Specialty drugs hold the promise to treat illness very specifically and have received more FDA approvals than traditional drugs. 2016 sales for the top 7 of 700 specialty drugs is estimated to be $9 billion. On the top is a drug designed to treat and cure Hepatitis C with estimated sales of $3 billion. Others that top the list treat cystic fibrosis, melanoma, hypercholesterolimea and breast cancer.
Cyber Security Prevention
Large health care organizations are suffering data breaches on a regular basis and have paid out billions of dollars in settlements. It stands to reason that spending will increase in order to secure data.
|Written by Susen Sawatzki
Healthcare Industry Expert
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