As we look ahead to the rest of 2020, healthcare forecasts remain uncertain. So, if we want to plan for next year, what will healthcare costs be in 2021?
PwC Predicts: What Will Healthcare Costs Be in 2021?
PwC (Price Waterhouse Coopers) looked at possible healthcare cost increases in 2021. You may register for a free ZOOM Webcast taking place on July 9.
Click here to access the full 31-page report.
According to the report:
Employer healthcare spending could fall in calendar year 2020 compared with 2019, and then rebound in 2021. How much it falls in 2020 and rebounds in 2021 is subject to many variables.
For 2021, PwC’s Health Research Institute (HRI) has formulated three scenarios to help guide employers and health plans as they determine the medical cost trend. A high-spending scenario, in which spending grows
significantly higher in 2021 after being down in 2020, forecasts a 10% medical cost trend. A medium-spending scenario, in which spending grows at roughly the same rate in 2021 as it did from 2014 to 2019, projects a 6% medical cost trend. And a low-spending scenario, in which spending remains dampened in 2021, translates to a 4% medical cost trend.
While spending may be up in 2021 over 2020, HRI identified two bright spots. (1) Health has gained ground slowly for years. COVID-19 forced its rapid adoption by both consumers and clinicians. In 2021, HRI expects telehealth to be a viable and desirable alternative to in-person care. Saving employers and health plans on the episodic cost of care delivered virtually. (2) Networks narrow out of necessity. Over a quarter of employers have considered this for the past few years. Some of those employers may move to a narrow network plan in 2021 as COVID-19 and the related economic downturn force employers to shed costs. As well as make healthcare providers more willing in the short term to give price concessions or take on more risks in exchange for predictable cash flows. If it helps them get patients to return.