As temperatures heated up in June, so did news about the rising health care costs in the US. Stories on total national health spending, the impact of health expenses on employment, long COVID effects and challenges, and related trends were intriguing to SmartBrief readers during the month. They were also interested in reading about Medicare’s plan to temporarily lower prices on several dozen prescription medications – a sliver of good news in a challenging environment.
US health spending to hit $7.7T in 2032
What happened: The CMS is projecting that national health care expenditures will rise to $7.7 trillion annually by 2032, up from $4.8 trillion last year. The agency expects that 2023 health care spending will have grown faster than the economy, with the sector’s proportion of gross domestic product increasing from 17.3% in 2022 to 17.6% in 2023.
What’s next: The health care spending growth rate will average about 5.6% per year over the next 10 years, compared with the projected overall economic growth rate of 4.3%. Health care expenditures will account for nearly 20% of the nation’s GDP by 2032. Medicare and Medicaid spending are expected to climb by several percentage points each over the period.
Employees feel the pinch of care costs
What happened: Rising health care costs don’t just mean lighter patient pocketbooks — they also result in higher unemployment, especially for people in the middle-income range, a National Bureau of Economic Research study found. As care prices increase, employers’ health insurance costs go up, potentially having a cooling effect on wages. Every 1% increase in health care prices corresponds to a 0.4% decrease in an employer’s staff roster, researchers said. “Rising prices are hurting the employment outcomes for workers who never went to the hospital,” said co-author Zarek Brot-Goldberg of the University of Chicago.
What’s next: In July, a BenefitsPro article detailed Mercer survey results showing that despite increasing costs, most employers don’t plan to cut staff health benefits at this time – but they do plan to be more strategic about it. More than a third of major employers said they would provide high-performance, narrow-network or alternative medical coverage emphasizing high-quality, cost-efficient services and enhanced clinical case management.
Long COVID comes with costs
What happened: A National Academies of Sciences, Engineering and Medicine report offered an updated picture of the toll of long COVID, the group of more than 200 lingering health symptoms people may experience after a SARS-CoV-2 infection. The effects of long COVID can be physical, psychological and financial, with lower-income individuals at particular risk for care disparities. However, symptoms are seen in people from all age and demographic groups.
“This disease, which has existed in humans for less than five years, can present differently from person to person and can either resolve within weeks or persist for months or years,” committee chair Dr. Paul Volberding said.
What’s next: A JAMA Data Brief reported that nearly 18 million Americans – about 7% of the population — had experienced long COVID symptoms by early 2023. Survey findings suggested that booster vaccines may help prevent long COVID, likely because they reduce the risk of severe SARS-CoV-2 infection.
Prices of some Medicare meds coming down
What happened: Toward the end of June, the CMS announced that Medicare members would see lower prices for 64 prescription medications from July through September after drugmakers increased prices faster than the inflation rate. The move was made under the Inflation Reduction Act, and the medications affected include therapies for cancer, infections, genetic disorders and osteoporosis.
More than three-quarters of a million enrollees could see significant savings, and White House domestic policy adviser Neera Tanden said the act aims to protect older adults from constant price hikes. Detractors countered that pricing restrictions could hamper innovation and drug development.
What’s next: A recent opinion piece published by STAT theorizes that the act could discourage manufacturers from developing better versions of and new uses for medications already on the market. “The point of the new drug price negotiations is to lower the cost of prescriptions, a worthy goal,” American Board of Legal Medicine chair Dr. Peter Rheinstein wrote. “But it shouldn’t be implemented in a way that undermines medical innovation.”
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