NEW YORK – According to a recent report released by PricewaterhouseCoopers’ Health Research Institute, medical cost trends in the private sector will drop from 9.9 percent in 2008 to 9.6 percent in 2009.
Historically, when medical cost trends flatten out, a spike usually follows – which could occur in 2010, said Bruce Henderson, director of Health Industries Advisory, Healthcare Payers for PricewaterhouseCoopers.
While many external drivers impact medical cost trends, health plans and employer groups are implementing or have implemented programs and IT to keep those trends down.
Henderson pointed out that lower-priced treatments have been one of the decelerators of healthcare cost increases.
“One of the key components in the recent deceleration is the drop in drug spending growth,” he said. “Nearly two thirds of all prescriptions are now generic, a trend that health plan design has influenced.”
Urbana, Ill.-based Health Alliance Medical Plans is seeing a 10 percent medical cost trend. CFO Gordon Salm said the health plan is making significant health IT investments. Health Alliance will complete its system conversion in 2009 and be able to automate administrative processes and provide information to its providers, employer groups and members, he said.
IT is also being used to identify at-risk members for case and disease management. These programs and its wellness initiative are areas of focus that will lower medical costs, Salm said.
Health Alliance is piloting a program to determine whether a value-based benefit design can lower medical costs.
Securing more contracts with caps on outpatient hospitals in such areas as ER visits and observation stays and moving to fixed fees versus chargemaster increases are other ways in which Health Alliance is attempting to control the shift of uncompensated costs to the private sector.
SelectHealth, a Salt Lake City-based nonprofit health plan serving members in Utah and Idaho, is expecting a 10.2 percent medical cost trend, which is flat compared to its previous year.
To automate processes and meet their partners’ needs, SelectHealth provides online self-service tools and portals for members, providers and brokers.
Its Rx COB tool enables members to view their medication history and compare actual costs, among other things.
“This tool manages costs through price awareness,” said Eric Cannon, chief of pharmacy. “We’re starting to see cost savings through a shift to less-expensive products.”