Topics: Meaningful Use Stage 2, Practice Management, medical billing services, Medical Billing Company
According to the latest projections from the Centers for Medicare & Medicaid Services (CMS), U.S. health spending will grow by 5.5 percent for 2018-2027. That’s not necessarily directly due to healthcare-industry developments – in fact, a significant portion of the uptick will stem from economic growth and population aging – but with health spending poised to increase at a pace 0.8 percent greater than the gross domestic product, external forces will certainly play a role in rising costs. With the total health share of the economy expected to reach 19.4 percent by 2027 (up from 17.9 percent in 2017), these costs will be felt across a wide range of industries and consumers.
What problems are putting spending on the rise to come? At NCG Medical Billing, we see the following three trends as having the heaviest impact in the years ahead – and we suggest you utilize an outsourced medical billing service to keep them from wreaking havoc on your healthcare practice’s bottom line.
3 High-Cost Healthcare Trends in 2020
1. Rising Drug Costs
In addition to pinpointing America’s economic growth and aging populace as cost drivers in its report, the CMS also acknowledged the problematic role of “faster growth in medical prices.” The most rampantly (and rapidly) growing of those prices? Prescription drugs. A Consumer Reports survey from September of 2019 found that 30 percent of respondents saw their drug costs increase during the year, with 12 percent reporting an increase of $100 or more. Another 2019 study found that drug prices had increased an average of 10.5 percent, or roughly five times the rate of inflation.
As newsworthy incidents like 2015’s Turing Pharmaceutical scandal – in which the company raised the price of an obscure 62-year-old drug by more than 4,000 percent – show, the healthcare industry lacks well-regulated price protections that could help rein in costs for both organizations and their patients. Hopefully, increased acceptance of new-to-market drugs by the FDA will increase competition among pharmaceutical companies and help lower prices over the long-term (although some recent studies suggest otherwise).
2. Missing Incentives
Unlike many other industries, the U.S. healthcare system has invested in creating programs that incentivize doctors to undertake steps to embrace technologically-driven operational enhancement, alternative approaches, and quality improvement initiatives. The purpose of these programs is to provide better care for individuals, produce better health outcomes for populations, and lower costs generally.
But what the industry and the government haven’t done is incentivize practitioners to embrace lower-cost care delivery efforts. Telemedicine and retail-clinic approaches to care are seeing widespread interest among consumers as more convenient, and less expensive, ways to interact with providers than the traditional office (or hospital) visit. But since traditional medical establishments are not incentivized to embrace such approaches, many aren’t going out of their way to explore how to make them part of their operations. This may be changing, however, as CMS rolled out a plan in early 2019 that would allow patients on Medicare Advantage to utilize telehealth programs in place of in-person care.
3. Industry Mergers
Consolidation has long been a cause for concern in the health insurance market. The Department of Justice moved to block two healthcare mega-mergers among insurers in 2017 – proposed unions between Anthem and Cigna, and Aetna and Humana – on anti-competition grounds. Although both mergers were called off, the fallout continues to impact the industry, with Anthem and Cigna still locked in a legal battle (as of early 2020) over the failed effort.
The Big Five may not have become the Big Three, but ongoing mergers between insurers, hospital groups, and other large healthcare-industry entities will continue to raise costs for providers across the sector in the years to come. After it’s failed courtship with Humana was ultimately called off, Aetna was ultimately acquired by CVS Health in a $70 billion merger. In 2019, 92 hospital mergers were announced nationwide, although the average value of those transactions ($278 million) was lower than 2018’s historic high of $409 million.
Fewer players in the insurance and healthcare provider market translates into less competition and bargaining power for both consumers and smaller practices. While consolidation is often pitched as a way to reduce costs, research has demonstrated that hospital mergers actually increased the price of hospital services by 6-18 percent.
Partnering With a Medical Billing Service
Keeping up with the rapid pace of change in the healthcare industry is a challenge for any medical practice. Doing so while running an efficient and effective medical billing process is even more difficult. That’s why partnering with an experienced medical billing service with intimate knowledge of the radically changing healthcare landscape is essential for offices looking to deliver the same uncompromising care that their patients have come to expect.
At NCG Medical, we’ve been helping healthcare practices of all sizes manage their medical billing needs and improve their revenue cycle management to remain competitive despite the ongoing disruption facing the healthcare industry. To learn how we can help your practice stay ahead of the medical billing curve and keep your collections running smoothly, contact us today for a consultation.
Use outsourced medical billing to mitigate your medical practice’s overhead costs. Contact NCG Medical now.
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