Medical costs have always been a matter of concern for a lot of people, and an increase in the costs can affect a large number of people. As 2018 is around the corner, the people have already started speculating whether the health care costs will increase, decrease, or stay the same.
As per PwC, the healthcare costs are expected to increase in 2018, but there would only be a slight increase in the costs. These increased costs are being termed as the “New Normal” in the healthcare industry. The industry experts are accentuating on the fact that the healthcare industry must adjust to the new normal because the costs will keep increasing modestly over the coming years as well.
2018 Will Witness a Slight Increase in Medical Costs
As per the industry insiders and HRI, 2018 will witness a slight increase in medical costs, and these increased costs are being termed as the “new normal”. The medical costs have been hovering in single digits in the past few years, and 2018 will see a continuation of the same trend where costs will increase only slightly. The huge cost spikes are unlikely to happen in the foreseeable future.
Among the various factors which are leading to the increase in the medical costs, rising inflation is a key factor. As per HRI, the U.S economy is in the midst of the long expansion and is gaining strength. The higher general inflation rates are going to slightly affect the labor-intensive health sector, driving up medical prices and wages.
Why Will The Medical Costs Not Hike Dramatically?
There are many factors that are helping the medical costs to avoid significant hikes and increase only slightly. Some of the factors are listed here:
- As per HRI, the movement to the high-deductible health plans will not gain much acceptance, and the growth in employer-based high-deductible health plans will slow down, leaving less space for stem increases in the healthcare service usage.
- With lesser branded drugs coming off patent, employers will face the dearth of opportunities to encourage their employees to buy the economic generics. This is also one of the strategies which have been used historically to keep the costs down.
- There are two forces which are likely to mitigate the overall health spending increase. The public and political scrutiny are continually putting the spotlight on the drug prices, and this may in-turn pressurize the drug companies to keep the price hikes in check. At the same time, the employers are learning to minimize waste by deploying advanced treatments, latest technologies, and better management.
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