Jun 20, 2019

2020 may be a turning point on health care costs

Illustration: Rebecca Zisser/Axios

Employers will likely step up their efforts to rein in health care costs next year, a new PwC Health Research Institute report predicts, partially because they've nearly maxed out their ability to offload costs onto employees.

What they're saying: "2020 likely will be, in some ways, a turning point in the long arc of employer-sponsored insurance, a year in which more employers fight back," the report's authors write.

The big picture: Employers' medical costs are expected to rise by 6% next year, thanks to drug costs, chronic diseases and greater access to mental health care.

  • Employers have handled rising health care costs over the last decade primarily by increasing employees' cost-sharing, but that strategy may have run its course.
  • At least one-third of employees in the HRI survey said they didn't have enough money saved to pay their deductible.
  • Employers “are at a very interesting kind of crossroads ... and now it's time to get active and start working on price," said Ben Isgur, HRI's leader.

Between the lines: Nothing keeps business' health care costs in check better than healthy workers — and employers are getting increasingly hands-on in that pursuit.

  • They're getting more active in the delivery of primary care, including worksite health clinics. Some are also negotiating contract prices and setting up their own provider networks.
  • Employers can also nudge employees toward lower-cost providers and more efficient forms of care — for example, trying physical therapy before surgery.

The bottom line: Employers are the health care system's sleeping giant. Prices will go down when employers decide to use their massive political and financial leverage.

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Coronavirus dashboard

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  1. Global: Total confirmed cases as of 2 p.m. ET: 5,453,784 — Total deaths: 345,886 — Total recoveries — 2,191,310Map.
  2. U.S.: Total confirmed cases as of 2 p.m. ET: 1,651,254 — Total deaths: 97,850 — Total recoveries: 366,736 — Total tested: 14,163,915Map.
  3. 2020: Trump threatens to move Republican convention from North Carolina.
  4. World: White House announces travel restrictions on Brazil Over 100 cases in Germany tied to single day of church services — Top Boris Johnson aide defends himself after allegations he broke U.K. lockdown
  5. Public health: Officials are urging Americans to wear masks over Memorial Day.
  6. Economy: White House economic adviser Kevin Hassett says it's possible the unemployment rate could still be in double digits by November's election — Charities refocus their efforts to fill gaps left by government.
  7. What should I do? Hydroxychloroquine questions answeredTraveling, asthma, dishes, disinfectants and being contagiousMasks, lending books and self-isolatingExercise, laundry, what counts as soap — Pets, moving and personal healthAnswers about the virus from Axios expertsWhat to know about social distancingHow to minimize your risk.
  8. Other resources: CDC on how to avoid the virus, what to do if you get it, the right mask to wear.

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