Health care spending slated to rise in 2015

Health Care and Health Insurance
by Dave Palmer

Health care costs have been rising for some time now, and as a result, so too has the amount consumers spend on it. But now, it seems that spending on health care may grow even more considerably over the course of next year.

The amount of money spent on medical are in the U.S. is going to rise 6.8 percent next year, but this number is actually relatively small in comparison with some of the increases seen about 15 years ago or less, according to the latest data from PricewaterhouseCoopers' Health Research Institute. Part of that is due to continuing increases in the amounts charged by health care providers, but also because consumers are now confident in their ability to spend reasonable amounts on treatments when and if needed.

Further, Kelly Barnes, the U.S. health industries leader for the firm, noted that inflation is also coming down because care providers are streamlining their services and reducing costs as a consequence, the report said. Part of this could be the result of more transparency being added to pricing by the Patient Protection and Affordable Care Act, but experts say it's still too early to tell for sure.

What else is having an effect?
In addition, it seems that spending growth might not be as robust among consumers in the coming year simply because of the ways in which their employers have been shifting health insurance costs to them over the last several years or more, the report said. As a result, they may be a little more frugal about the kinds of things they spend on, and might even shop around to see where they can obtain the lowest costs for coverage available to them overall. However, that could grow more difficult in the future, because deductibles could continue to grow, and the types of care available to them could grow smaller simply because their networks are often no longer as big as they once were.

It's important for insurers to keep in mind, however, that increases in health care spending does not necessarily mean that costs are going up appreciably, but could instead be a function of the fact that more Americans simply have health insurance and are therefore more willing to spend money on treatments that they might have eschewed before. Consequently, this is likely a very positive sign for many health policy issuers.