Medical costs projected to rise 8.5% in 2012

posted at 5:57 pm on May 18, 2011 by Tina Korbe

Health care costs just keep rising — and at an ever-faster pace. Medical costs for workers are projected to increase 8.5 percent in 2012, up from an 8 percent increase in 2011, according to a new report from consulting firm PwC’s Health Research Institute.

In the report summary, PwC names three key price accelerators:

  • Provider consolidation continues
  • Cost-shifting from Medicare and Medicaid increases
  • Post-recession stress builds up on the workforce

So, the recession bears a bit of the blame, but the bulk of it falls on the unaffordable Affordable Care Act. Or, as PwC more politely puts it, “An interesting blend of reactions to the recession, the slow recovery, health reform and other variables will affect the medical cost trend in 2012.” But, certainly, provider consolidation was a stated goal of Obamacare, as Julian Pecquet explains:

Improving care coordination is a key goal of the law that the government hopes will lower costs over the long term, but health insurers say it will reduce competition and increase rates.

Of course it will. PwC’s second price accelerator shouldn’t come as much of a surprise, either. As Medicaid and Medicare pay an even smaller proportion of cost to hospitals, private payers will have no choice but to pay more. The report puts it this way:

Private health plans generally pay above costs, while Medicare and Medicaid pay below costs to hospitals and physicians. For example, in 2009, on average, Medicare and Medicaid paid about 90 percent and 89 percent, respectively, of cost to hospitals, while private payers paid 134 percent of cost to hospitals. Medicare accounts for about 42 percent of hospital inpatient days; Medicaid accounts for about 11 percent. Both shares have been increasing and thus pushing uncovered costs onto a smaller base of private payers. Medicare and Medicaid rates are expected to decline relative to private payment in 2012 because of the impact of the PPACA on Medicare payment rates and the impact of the recession on Medicaid.

In 2008, the United States had a health care problem: high costs (among other things). In 2012, the United States will still have a health care problem: higher costs. All health care conversation fatigue aside, it’s no wonder the issue remains of paramount importance for presidential hopefuls.

 

 


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Surprising.

/sarc

cannonball on May 18, 2011 at 5:59 PM

Being an RN, I’ll tell ya what ISN’T causing medical costs to rise……our salaries. :(

tencole on May 18, 2011 at 6:02 PM

B-b-but we have ØbamaCare now. How can this be?

Kafir on May 18, 2011 at 6:02 PM

What are the costs projected for the citizens of Nanzi district…?

d1carter on May 18, 2011 at 6:02 PM

Thank you to Obama, Pelosi, Reid, and all the dimwits that voted for this crap.

I never wanted anyone to suffer going without health care, but now…with your brilliant plan in effect…we’ll ALL suffer. Thank you for helping us to see our evil ways, as you are not evil, and have no ulterior motives for this, but want the best for all of us no brained, inferior beings.

Every deed reaps it’s own reward. I can’t wait to see what your reward will be for this.

capejasmine on May 18, 2011 at 6:04 PM

d1carter on May 18, 2011 at 6:02 PM

s/b Nanzi Pelosi’s district

d1carter on May 18, 2011 at 6:07 PM

Are you better off today than you were 2 years ago?

ted c on November 1, 2010 at 2:47 PM

Yep.

crr6 on November 1, 2010 at 2:54 PM

Del Dolemonte on May 18, 2011 at 6:09 PM

Just wait until 2014 hits. 8.5% inflation will be a fond memory.

Chuck Schick on May 18, 2011 at 6:12 PM

Predictable. Remove competition, institute price controls, increase demand (more patients), reduce supply (fewer doctors). What could go wrong?

txmomof6 on May 18, 2011 at 6:12 PM

Can someone tell me…is there a waiver for this?

Electrongod on May 18, 2011 at 6:12 PM

Provider consolidation continues

So that will be the term for rationing. Interesting.

But barry said his mom wanted him to be a combo of Einstein, Gandhi, and MLK…and he’s a brilliant man, one of the most brilliant in the US…and certainly the most brilliant president. So I’m sure it will work out fine…just like the Affordable Housing stuff he was involved with.

r keller on May 18, 2011 at 6:14 PM

How about, if you subsidize something, it’s demand will go up, and its price goes up? Same with food stamps and food prices. Same with college and tuition. Same with cheap mortgages and housing prices. And on and on.

Paul-Cincy on May 18, 2011 at 6:15 PM

But but but most health insurance costs rise by an average of 10% per year, so if it only rises by 8.5% we’re saving money!!!11!
/new liberal talking point

txhsmom on May 18, 2011 at 6:16 PM

Factor in another 8-10% increase for 2012, then add ‘em up and tie that ball-n-chain around Obama’s neck during the campaign and especially during the debates. That should be a more than 30% rise and the thing isn’t even fully in force yet! Affordable Care Act my azz.

ornery_independent on May 18, 2011 at 6:18 PM

r keller on May 18, 2011 at 6:14 PM

“provider consolidation continues” until there is one…this is what BHO is going for. He’s just moving it in small increments.

d1carter on May 18, 2011 at 6:19 PM

…all part of the plan…if only we coulda read it…

ornery_independent on May 18, 2011 at 6:20 PM

Are you better off today than you were 2 years ago?

ted c on November 1, 2010 at 2:47 PM

Yep.

crr6 on November 1, 2010 at 2:54 PM

Del Dolemonte on May 18, 2011 at 6:09

Your unemployment benefits got extended. That and your food stamps make this economy a pretty sweet deal compared to when you had to work for a living under the evil Bush.

jdflorida on May 18, 2011 at 6:21 PM

unexpectedly?

clement on May 18, 2011 at 6:23 PM

But barry said his mom wanted him to be a combo of Einstein, Gandhi, and MLK…

r keller on May 18, 2011 at 6:14 PM

And he is!

He has Einstein’s knowledge of foreign relations.
He has Gandhi’s knowledge of economics.
And He has MLK’s skin color.

PackerBronco on May 18, 2011 at 6:24 PM

the unaffordable Affordable Care Act

Awesome. Bring on the snark.

John the Libertarian on May 18, 2011 at 6:26 PM

The thing I cannot understand is WHY hospitals continue to accept Medicare/Medicaid patients. They are a financial drain.

If you simply didn’t accept them and dropped your Emergency room, wouldn’t you be much more competitive in the areas you DID cover?

OBQuiet on May 18, 2011 at 6:28 PM

Are you better off today than you were 2 years ago?

ted c on November 1, 2010 at 2:47 PM

Yep.

crr6 on November 1, 2010 at 2:54 PM

Del Dolemonte on May 18, 2011 at 6:09 PM

Wait till she’s done interning and starts looking for a real job. May have to move back into Granny’s basement. Of course, given her high scores/school attending, she’ll deny all that, so best thing to ask is “are your family and friends better off today than 2 years ago. IOW did Obambi’s tide raise all their boats. Lol.

AH_C on May 18, 2011 at 6:30 PM

Hope.
Change.

carbon_footprint on May 18, 2011 at 6:34 PM

Lowballing it.

8.5%?

Have you seen the expenditures planned under ObozoCare?

hillbillyjim on May 18, 2011 at 6:37 PM

BTW, to the authoress:

Two very good posts today. Welcome to the funny farm!

hillbillyjim on May 18, 2011 at 6:42 PM

Well, probably three…

… I just couldn’t bring myself to care any more about Ahnold.

hillbillyjim on May 18, 2011 at 6:44 PM

That’s a feature, not a bug.

Wait until we’ve got single payer! Then costs will go down because people simply won’t get any healthcare.

I really wish Leftists could simply destroy the communities they live in, and leave mine alone.

Aquateen Hungerforce on May 18, 2011 at 6:54 PM

I haven’t seen the illegal aliens sucking off our ER. Gobs and gobs of kids that are born here(set one foot on American soil), given American rights, getting millions upon millions of taxpayers money for the illegal aliens to be here. All these costs are in there someplace for the bottom line. If you have to wait to see a doctor or go to the ER, who is ahead you you old or young?
L

letget on May 18, 2011 at 7:17 PM

Medical costs might be going up 8%, my business’s employee health care insurance rates (HSA coverage in WA) is going up 30%…. And that’s the least expensive plan and least percent increase of the plans available in WA for small business. Where’s my waiver?

drfredc on May 18, 2011 at 7:17 PM

The thing I cannot understand is WHY hospitals continue to accept Medicare/Medicaid patients. They are a financial drain.

If you simply didn’t accept them and dropped your Emergency room, wouldn’t you be much more competitive in the areas you DID cover?

OBQuiet on May 18, 2011 at 6:28 PM

If you take Medicare at all for any patient you have to take it for all. You cannot pick and choose. Also, hospitals cannot by law turn people away from the ER for inability to pay. What non-specialty hospital is going to turn away the entire population of 65 and older? They would be out of business.

txmomof6 on May 18, 2011 at 7:44 PM

Being an RN, I’ll tell ya what ISN’T causing medical costs to rise……our salaries. :(

tencole on May 18, 2011 at 6:02 PM

I pay nurse salaries, don’t even go there. Become a traveling nurse, you’ll clean up.

ladyingray on May 18, 2011 at 7:46 PM

I pay nurse salaries, don’t even go there. Become a traveling nurse, you’ll clean up.

ladyingray on May 18, 2011 at 7:46 PM

Not that I am saying costs are going up due to nurses’ salaries, but I know what nurses are making. More than I make with a BBA and nearly 30 years of experience. Y’all do pretty good.

ladyingray on May 18, 2011 at 7:48 PM

ladyingray on May 18, 2011 at 7:48 PM

The problem around here is that you have basically two companies with a monopoly on all of the health-care industry in this region. Between Em Shaw and Well Meant there is nobody else. That is what depresses your pay and everyone else’s in this particular slice of the world.

I’m relieved that my wife got the **** out of it.

hillbillyjim on May 18, 2011 at 8:07 PM

The GOP must make the repeal of NobamaCare part of the 2012 platform, no exceptions. Someone needs to slay the unaffordable health care beast, and fast.

Philly on May 18, 2011 at 8:12 PM

I haven’t seen the illegal aliens sucking off our ER. Gobs and gobs of kids that are born here(set one foot on American soil), given American rights, getting millions upon millions of taxpayers money for the illegal aliens to be here. All these costs are in there someplace for the bottom line. If you have to wait to see a doctor or go to the ER, who is ahead you you old or young?
L

letget on May 18, 2011 at 7:17 PM

Yep, I’d like to see the real costs of illegal alien care and what it does to costs for the rest of us. The perversity of it all is that Obamacare will not force illegals to get insured. What part of illegal don’t the progs understand? It’s as dumb as the liberals’ gun-free zones.

slickwillie2001 on May 18, 2011 at 8:28 PM

the unaffordable Affordable Care Act

When the government passes a law called “The XYZ Act” or creates “The Department of XYZ”, or “The XYZ Program”, you can be almost certain that it will accomplish exactly the opposite of XYZ.

The Department of Energy

The Department of Education

The Affordable Care Act

(etc.)

ZenDraken on May 18, 2011 at 8:40 PM

No…no….no. This can’t be true. Just ask Nancy Pelosi. SHE FIXED the health care problem.

GarandFan on May 18, 2011 at 8:56 PM

No…no….no. This can’t be true. Just ask Nancy Pelosi. SHE FIXED the health care problem.

GarandFan on May 18, 2011 at 8:56 PM

Nancy Pelosi fixed. That’s all I heard.

I’m not agin it.

hillbillyjim on May 18, 2011 at 9:01 PM

Just in time for the next election. I said this months ago. Wait til next January when paychecks shrink. The PUBS needs to jump all over this.

CWforFreedom on May 18, 2011 at 9:53 PM

Y’all do pretty good.

ladyingray on May 18, 2011 at 7:48 PM

Shhh just like with the teachers don’t ruin the ruse. Overall teachers have it pretty good and summers off too. They eat it up that everyone thinks they have it bad and boy do they use it. (as they laugh )

CWforFreedom on May 18, 2011 at 9:56 PM

Just wait until Obama care fixes doctors salaries….

There won’t be any primary care doctors…except for the the ones that barely passed medical school and went to med school overseas. The good ones go into specialties were they make significantly higher salaries.

Plus it will be 2-3 month wait to see one….

nazo311 on May 18, 2011 at 11:34 PM

The GOP must make the repeal of NobamaCare part of the 2012 platform, no exceptions. Someone needs to slay the unaffordable health care beast, and fast.

Philly on May 18, 2011 at 8:12 PM

That is the ticket. But government interference in the health insurance market and the dominance of Medicare and Medicaid in that market make in impossible to stop the hemorrhaging just by repealing this latest massive takeover of healthcare.

AshleyTKing on May 19, 2011 at 2:03 AM

If you take Medicare at all for any patient you have to take it for all. You cannot pick and choose. Also, hospitals cannot by law turn people away from the ER for inability to pay. What non-specialty hospital is going to turn away the entire population of 65 and older? They would be out of business.

txmomof6 on May 18, 2011 at 7:44 PM

I understand your first point. But you miss mine.

Hospitals routinely claim that medicare reimbursements do not cover costs. So you might “What business is going to turn away an entire group of unprofitable customers?” I would expect the answer to be most.

There is some investment cost that you can amortize over a larger group by accepting them. But lowering your costs to the insurer to become a ‘Preferred’ provider would drive more paying customers your way. So, unless the hospitals are wrong about losing money on Medicare/aid patients, they should move to stop accepting them.

And I could be wrong but I think only hospitals accepting medicare are required to accept emergency cases without first assuring payment.

Heartless maybe. But that is what charities, not federal tax dollars, are for.

OBQuiet on May 19, 2011 at 11:44 AM

What, so Paul Ryan is actually right? Nah…can’t be!

“Medicare IS the engine…”

– Ryan

Miss_Anthrope on May 19, 2011 at 11:56 AM