Overall, the forecasts are close to actual cost increases, but sometimes researchers revise previous estimates, said Thom Bales, head of US health services at PwC. For example, the cost growth forecast of 6.5% in 2022 has been revised to 5.5%.
Going forward to 2024, rising supplier costs and subsequent price hikes, coupled with rising pharmaceutical prices, will drive healthcare inflation, PwC researchers say.
Here’s what PwC predicts the industry will experience next year.
Suppliers will pass higher labor, supply costs
Hospitals, physician groups, and other providers have experienced significant labor and supply costs increase over the past three years amid a spike in the number of clinicians retiring or leaving the industry, Popularity of personnel agencies and temporary clinical staff and inflationary. As a result, suppliers are expected to Lobbying for higher rates IN Negotiate contracts with insurance companies.
Merge groups of doctors and hospital is expected to increase the bargaining leverage of suppliers. Some studies indicate that Consolidation leads to higher pricesoften results in higher premiums, increased patient share of costs, and salary stagnation for workers.
Bales said there will be a lag in data regarding supplier price increases, depending on the timing of contract negotiations with insurers. “The impact of inflationary pressures facing health systems has not been fully realized yet,” he said.
Drug prices could rise in double digits
Price increases by drugmakers are expected to be in single- or double-digit highs next year, driven by the advent of expensive drugs such as gene and cell therapies. The researchers note that the average annual price for new drugs has increased from $180,000 in 2021 to $222,000 in 2022. Meanwhile, providers are spending more to administer one. Drug shortages are on the rise as they seek alternative treatments and train staff to manage unfamiliar products. Although more than biosimilar—less expensive versions of drugs similar to biologics—are hitting the market, Acceptance between doctors and patients was relatively slow.
Bales notes that about two-thirds of insurers rank biosimilars as a key lever for reducing healthcare costs. “There is an opportunity to apply more [of biosimilars]”he say.
Outpatient shifts can offset the increase
Insurers have reported reduced inpatient utilization and a shift to lower-cost outpatient treatment, virtual and at-home care settings. That has reduced the hospital’s revenue, which is also threatened by Proposal to expand neutral payments in place. It remains unclear whether inpatient utilization and the decline in hospital surgeries will return to pre-pandemic levels, the PwC researchers said. Insurers expect that cost increases will mainly stem from increases in supplier and pharmaceutical prices rather than increased usage.
Employers hold power
Employers will ask for lower cost options from insurance companies. They will promote health plans with narrow network Reportedly, sending patients to high-quality, low-cost providers. Employers will also likely encourage the use of telehealth for counseling and other mental health treatment, potentially limiting cost increases.
“Employers continue to be very active in trying to manage the cost, quality and care experience of their employees.”