3 Simple Things to Know About Healthcare Spending’s Future
By - Predicting the delicate future of healthcare cost and spending trends based on past algorithms, collected data implications, and the simple art of a strong financial guess based on knowledge and skill sets is an important aspect of understanding what comes next within the realm of revenue cycle management.
Here are three simple pieces of information that will hopefully help put into perspective where the healthcare industry sits currently and what can be expected next around the bend in terms of projected spending trends, cost expectations, and notable revenue influences.
Healthcare history is expected to repeat itself
According to recorded healthcare spending trends from the past decade, spending is on the up and up, as a report from the Kaiser Family Foundation confirms. From 2010 to 2013, total national health expenditures jumped from over $2.6 trillion to $2.9 trillion. Such numbers – averaging out at over $9,200 per person – include spending by federal governments, local governments, private companies, and individuals.
As RevCycleIntelligence.com reported, healthcare spending is projected to continue its upward spiral throughout the next decade, by an average of 5.8 percent until 2024. The Centers for Medicare & Medicaid Services (CMS) expects healthcare spending will soon top $3 trillion.
Other collected data confirms healthcare spending will soon top $10,000 per person as costs transition into the greater realm of high-deductible plans, resultantly shifting the way billing is executed and making up-front data collections all the more challenging, as RevCycleIntelligence.com stated.
Expect the Cadillac tax to soon make waves
The Cadillac tax – a 40 percent excise tax on high-cost health plans provided by some employers – goes into effect in about 3 years. Twenty-seven percent of those polled anticipate the largest Patient Protection and Affordable Care Act (PPACA) compliance increase in 2018. One in three employers will be affected by the tax if they fail to make additional changes.
The beginning of a radical cost reduction wave is making headway, nonetheless. As RevCycleIntelligence.com confirmed, employers are looking to push back the Affordable Care Act (ACA) as much as it will bend before snapping. If health spending does regress backwards to the approximate 6 percent mentioned earlier, increased margins can be expected and radical cost reduction strategies will need to be amply revisited for the healthcare industry to remain viable long-term.
Many employers are shifting away from preferred provider organizations to high-deductible plans to avoid penalizations from the Cadillac tax under the ACA, as RevCycleIntelligence.com additionally stated.
The Cadillac tax also poses a sizable concern for union-sponsored health plans that will potentially generate both short-term and long-term influences, also confirmed RevCycleIntelligence.com.
Out-of-pocket spending up by 70 percent over 13 years
Out-of-pocket spending regarding physician and clinician services topped 55 billion dollars in 2013. Nonetheless, 13 years prior, this number was 70 percent lower at over 36 percent.
Out-of-pocket spending regarding hospital services was 13.5 billion dollars in 2000. This number topped 32 billion dollars in 2013.
This year, out-of-pocket copayments, coinsurance costs, and deductible expenses are projected to surpass $345 billion, as RevCycleIntelligence.com reported, meaning more beneficiaries are steering clear of the physician’s office in an effort to keep their wallets from emptying out. Increased efforts are being placed on consumer choice to make the process of paying for medical services a tad easier and increase billing fluidity and expediency.
