PricewaterhouseCoopers and Medco Health Solutions released two new views
of cost trends in health care during the past week, building on the
release of the Milliman Medical Index. PwC Health Research Institute's
"Behind the numbers: Medical cost trends for 2012," examines the
medical cost trends for employers in 2012. This new report found
"Medical cost trend is expected to increase from 8 percent in 2011 to
8.5 percent in 2012." And two main drivers identified by PwC are
provider consolidation and cost-shifting to the private sector.
Providing a view of prescription drug utilization and pricing trends, Medco's Annual Drug Trend Report showed this week that while the overall growth of prescription drug prices is at an historic low (as a result of increased use of generic drugs), the cost of specialty treatments is still increasing at an alarming rate. According to Medco's report "Specialty drug trend was 17.4 percent in 2010, fueled by unit cost growth of 11.5 percent."
Federal
There is no Federal report for this week.
States
ARIZONA: The Department of Insurance (DOI) held a public hearing on rate review as part of its Health and Human Services (HHS) grant activities. The DOI has retained Mercer Consulting to assist in performing a gap analysis to identify areas that need to be addressed in order to comply with the requirements of the Affordable Care Act (ACA). During the hearing, it was noted that the state's current statutory scheme does not authorize the DOI to review a health insurer's medical loss ratio, potentially not allowing the state to meet the HHS requirement of having "an effective rate review process."
The Director of Insurance and the Governor's office also hosted their first workgroup on the implementation of an exchange. Despite the legislature's refusal to pass an exchange bill, there is concern at the executive level about a lack of preparedness in the event the ACA is not repealed or found unconstitutional. This week's topic was the qualified health plan certification, and participants focused on not adding requirements beyond the ACA minimum benefit requirements.
Providing a view of prescription drug utilization and pricing trends, Medco's Annual Drug Trend Report showed this week that while the overall growth of prescription drug prices is at an historic low (as a result of increased use of generic drugs), the cost of specialty treatments is still increasing at an alarming rate. According to Medco's report "Specialty drug trend was 17.4 percent in 2010, fueled by unit cost growth of 11.5 percent."
Federal
There is no Federal report for this week.
States
ARIZONA: The Department of Insurance (DOI) held a public hearing on rate review as part of its Health and Human Services (HHS) grant activities. The DOI has retained Mercer Consulting to assist in performing a gap analysis to identify areas that need to be addressed in order to comply with the requirements of the Affordable Care Act (ACA). During the hearing, it was noted that the state's current statutory scheme does not authorize the DOI to review a health insurer's medical loss ratio, potentially not allowing the state to meet the HHS requirement of having "an effective rate review process."
The Director of Insurance and the Governor's office also hosted their first workgroup on the implementation of an exchange. Despite the legislature's refusal to pass an exchange bill, there is concern at the executive level about a lack of preparedness in the event the ACA is not repealed or found unconstitutional. This week's topic was the qualified health plan certification, and participants focused on not adding requirements beyond the ACA minimum benefit requirements.
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