Not all trends are new or clearly inflators or deflators of the medical cost trend but they are important enough influencers to watch. These are the top items HRI will be following over the next year to see how they influence the medical cost trend:
- Drug spending – The pipeline of costly cell and gene therapies is only expected to increase. Use of biosimilars, a cheaper but still costly version of branded biologic medicines, has started to increase in the US. Employers are covering more of the increases in costs. On average, insurance covers a larger share of retail prescription drug spending than a decade ago, while consumers’ share has leveled off in recent years.
- Cybersecurity – The costs associated with data breaches and ransomware attacks can be material, hindering an organization’s ability to operate. While cyber attacks remain a big threat, determining how much to invest in mitigating that threat is not always simple. Forty-eight percent of health industries executives said that they are increasing their cyber budgets in 2021. Companies also are using automation technologies to identify and respond to security events. Twenty percent of health industries executives surveyed by us said they were already seeing benefits from using artificial intelligence in cyber defense.
- Surprise billing – An intra-industry squabble between payers and providers that often left consumers with unexpected medical bills has largely been put to rest with the No Surprises Act, which takes effect Jan. 1, 2022. The implications for employer healthcare spending are uncertain. The Congressional Budget Office said the law will lower premiums by 0.5% to 1% due to “smaller payments to some providers.” Others think the law could drive higher spending as costs shift from the consumer to the payer or employer, and the new costs of arbitration come into play.