An analysis shows that 2022 will likely show a decrease in the COVID-19 pandemic’s effect on healthcare spending.
Healthcare spending is expected to only rise 6.5 percent in 2022 as the industry tries to stable out after the choppy seas of the COVID-19 pandemic.
According to the PwC Health Research Institute’s report, “Medical cost trend: Behind the numbers 2022,” the trend is slightly lower than the 7 percent projected medical cost trend in 2021. The 2022 trend was larger than the historical trend between 2016 and 2020.
The report defines medical cost trend as the projected percentage increase of cost to treat patients assuming benefits remain the same from one year to the next. For 2021 and 2022 the cost trend increase over the prior year with effects of the pandemic removed. This metric is influenced primarily by changes in the price of medical products and services, the number or intensity of services used, and in the case of 2021 and 2022 changes in price and utilization of services connected to COVID-19.
Factors inflating costs into 2022 include the increased use of healthcare services as those who deferred care during the pandemic while COVID-19 costs are also expected to persist into the year. Costs are also increasing due to the healthcare system preparing for the next pandemic and invests in digital avenues to enhance the patient relationship while increasing utilization, the report says.
Meanwhile, patients have leaned into lower-cost care settings deflating the cost of care and embracing care outside of doctors’ offices. Systems are also finding ways to provide more healthcare for less through novel work arrangements, process automation, and cloud technology, according to the report.