Read about Healthcare Industry Overview and Trends in 2016. Global healthcare industry reviews and statistics.
The healthcare industry also termed as the health economy is a cluster of horizons within the economic system which provides curative, rehab, palliative care and preventive services. What is healthcare trend and why is this important? Year by year the trends in the healthcare industry is changing rapidly for reasons such as increase in the surgical costs and innovations.
Healthcare Industry Overview
This trend have an impact over employees, policy holders, insurance companies and care providers which is effected by location of the employees based around the world. The following drive may cause the trends to have an impact; Price inflation or deflation, the utilization of healthcare services, Age factor, treatment patterns, Changes in legislations, improvement in medical technologies and drug therapies. Healthcare’s basic strategy is to put emphasis on the value of their employees, keep them healthy and productive and sustain costs.
Healthcare Industry Trends
Medical cost trends and projections in 2016, As we are entering the year 2016 the forecast suggests that there will be a downward slide in the spending costs in the coming year as compared to the year 2015 but it will still outpace the overall economic inflation. As stated the spending growth in the US health economy is $2.9 trillion currently.
Although the industry is financially healthy because of the increase in customer base, earning reports and stock prices, yet affordable healthcare, however, remains out-of-reach for many consumers.
America’s multinational banking and services holding company, Wells Fargo Insurance recently released results for the 2015 Spring Healthcare Trend Survey of more than 65 insurance companies nationwide. This advisory will review the concept of trend, current trends by product, and reveal our medical trend projections for plans beginning in calendar year 2016.
There are some factors which will affect the spending growth the year 2016 out of which cost shifting being on the number one spot as there will be a greater use of virtual care and more savvy consumers being guided towards the cost effective care which would put downward difficulty on spending related to health. It has not greatly influenced health spending since the business and their plans shifting more of its cost to their employees.
There is a saving of billions of dollars across the healthcare system because of the remote monitoring yet there is growth in the complicated healthcare choices for expansion.
Because of the super sized cyber security investments to protect individual health data against breaches, the healthcare companies have to bear the loss, there is a trend from the opposite direction where more drugs in the high cost are following the Hepatitis C specialty drugs.
Healthcare Industry Overview, Trends and Issues in 2016
In the year 2016 some top health issues will come into practice which are as follow:
Healthcare Industry Issues
Issue 1: 2016 is the year of merger mania, high-profile mergers and acquisitions likely will continue in 2016, with regulators taking center stage in the debate over how consolidation impacts consumers. Issue 2: Goldilocks comes to drug prices reminiscent of the proverbial story of Goldilocks the search is on for a drug pricing formula that is “just right.”
Issue 3: Care in the palm of your hand thanks to technology and shifts in financial incentives, care will begin to move into the palms of consumers’ hands, providing care anywhere, anytime.
Issue 4: Cyber security concerns come to medical technology as security breaches become more common and costly, attention shifts to buttressing the security of medical devices.
Issue 5: The new money managers shouldering higher deductibles, consumers seek help managing their health spending with fresh tools and services developed by players new and old.
Issue 6: Behavioral healthcare: no longer on the backburner employers and healthcare organizations eye behavioral healthcare as key to keeping costs down, productivity up and consumers healthy.
Issue 7: Care moves to the community as payment shifts to value-based models, health systems will pursue lower-cost settings more aggressively than before while employing creative approaches to distributing care.
Issue 8: New databases improve patient care and consumer health new databases and database tools will allow industry players to analyze data from many sources in novel ways, finally unlocking insights embedded in the reams of information being collected about health bio similar, lower-cost substitutes for branded biologic drugs, are expected to begin to offer some counterweight to rising drug prices in 2016, much as generic drugs did 30 years ago.
Issue 9: The medical cost mystery In the journey to value-based care, health systems dig in to calculate the true cost of services, an exercise that also can uncover opportunities to become more efficient and improve care.” As stated by PWC.
Comparison of Average Trends
Here we now compare the Average trends in 2015 as to future trends in 2016, In Wells Fargo Insurance’s 2015 Employee Benefits Market Outlook, we forecasted medical trends would remain at or slightly below 2014 levels.
As you’ll see in the forthcoming charts, the prediction is on target so far. Medical trends have decreased the past couple of years but they remain in the high single digits, ranging from 7.2% for HMO to 9.0% for Indemnity Fee-for-Service annually. That difference may seem insignificant, but a difference in healthcare trends of 2.0% compounds to a 10.4% difference in plan costs after just five years.
In the current environment of employers’ extreme sensitivity to costs, we expect both national HMOs and more localized staff-model HMOs to increase market share as long as these differences in cost trends between HMO and other product lines continue to flourish.
Medical cost trends
While medical cost trends improved just an year ago, the survey shows a continued increase in prescription drug cost trends. The primary reason for this acceleration is growth in the costs and usage of specialty drugs.
The dichotomy between medical and drug trends have resulted in drugs having an increased proportion of total healthcare spend. The prescription drug component of employers’ plan designs continues to receive intensified scrutiny from our clients and us.
Looking back at historical trends helps us understand the evolution of this business. It also gives us the benefit of hindsight while looking for drivers (e.g. we know prescription drugs trends have been high, so we can begin the process of looking for the culprits).
This is vitally important for learning about how we arrived in our current environment, but less telling for what the future holds. Our ability to plan for the future alongside our clients lies in our ability for anticipating cost changes before they occur. This year, for the first time, Wells Fargo Insurance has developed healthcare cost trend forecasts for next year.
In our survey, we collected probabilistic data from all of the carrier respondents in regards to where they project trends for 2016. This data, paired with our judgment, was used to project a range of cost trends for each product. We are also providing an expectation for the national average in 2016.
The range for each medical product exists because of both the variance in carrier responses, as well as localized variances in healthcare delivery. This is a first look into the cost trends that will be used to set premiums for 2016.