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Health Care Spending Increasing Amidst Uncertainty
June 24, 2014
For the first time in five years, the rate of growth in healthcare spending is projected to increase from the previous year. Those are the findings in a new report from major consulting firm PricewaterhouseCoopers (PwC), which forecasts a 6.8 percent growth in health industry spending in 2015. But what does that mean for consumers and taxpayers?
According to the PwC report, several key factors will contribute to more healthcare spending in 2015:
Importantly, the report attributes a significant portion of new healthcare spending to newly-insured Americans who qualified for coverage under the Affordable Care Act (ACA) and will be shopping for coverage options. Next year also happens to be the deadline by which state-run insurance exchanges must become self-sufficient according to the law, but as health spending and enrollment in ACA plans is projected to grow, many states aren't sure how they'll pay those bills.
As Sarah Kliff at Vox.com notes, the federal government has already issued $4.6 billion in taxpayer-funded grants to help states launch their own insurance marketplaces. At least 15 of the 17 states that opted to run their own exchanges have indicated that they will continue to do so in 2015, and in light of considerable uncertainty about how much it'll take to finance them, that could mean either:
Regardless of which path states choose to take, significant spending will be required to keep up with increasing healthcare costs. As the PwC report notes:
"A stronger economy and millions of newly insured Americans mean an uptick in spending growth for healthcare organizations. That may be a welcome respite from recent years of budgetary pressure. But the fact that health spending continues to outpace GDP underscores the need for a renewed focus on productivity, efficiency, and, ultimately, delivering better value for purchasers."
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