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Blog & News

Session 4: A Look at PwC Health Research Institute’s 2020 Medical Cost Trend Report

Medical Cost Trend: Behind the numbers 2020

by

PwC Health Research Institute (HRI)

Condensed and presented by Advanced Plan for Health

The Advanced Plan for Health team regularly scans the health market for trends, analysis and insight. In our research, we found The PwC HRI Medical Cost Trend: Behind the Numbers 2020 report to be full of valuable healthcare market information and thought our readers would benefit from the report findings. We decided to condense and present the PwC HRI report in a bi-weekly blog series to highlight what we found to be most pertinent to our readers and to better understand factors that could potentially affect the 2020 medical cost trend. Below is Session 4: Chronic conditions will continue to plague the populace, of 11 sessions, per the PwC Health Research Institute (HRI) report.


Session #4: Chronic conditions will continue to plague the populace

Per capita employer spending on an individual with complex chronic diseases, defined as having one or more chronic diseases affecting multiple body systems and requiring complex disease management, is eight times that of a healthy individual (see Figure 6). Also, 62% of individuals with employer-based insurance have a chronic or complex chronic disease, making up 85% of total employer-based healthcare spending. (46) Two chronic diseases—obesity and diabetes—are on the rise among individuals with employer coverage, driving the utilization of healthcare services and inflating cost trend in 2020.

Excess weight puts individuals at risk for multiple chronic diseases—from obesity to Type 2 diabetes to hypertension and cardiovascular disease. (47) An HRI analysis found that the average annual spending between 2014-16 for an obese individual with employer-based insurance was 1.3 times higher than a normal weight individual, while spending for an extremely obese individual was 1.8 times higher (see Figure 7). (48)

The number of individuals with employer-based insurance who have diabetes has increased 28% from 2005 to 2015. (50) Average per capita spending from 2013-15 for individuals with employer-based insurance who have diabetes was 2.2 times higher than someone without any chronic conditions during that same time period. (51)

In light of these trends, employers have implemented programs to combat and manage chronic diseases. In 2019, 86% of employers offered a diabetes management program, and yet the rate of diabetes among individuals with coverage through an employer continues to grow. Many employees are looking to their employers to help manage their health; 42% of consumers surveyed by HRI with employer-based insurance said they believe their employer has a responsibility to help them manage their physical health and well-being. (54) “The predominant mentality is that a chronic disease must be managed and that much of the control is out of the individual’s hands,” said Dr. Dexter Shurney, president of the American College of Lifestyle Medicine, in an interview with HRI. “With lifestyle-driven chronic diseases, this is not the case.”


With all that is stated in this recap concerning chronic conditions, each employer needs access to data that will allow them to determine the unique inflators and deflators that are driving their cost trend. In turn this will enable the development of strategies that provide a path to intervene at the point of risk and mitigate its impact, e.g. benefit design considerations, care management effectiveness, and others. To learn more about this research, feel free to contact us here.


PwC HRI Sources

(46) PwC Health Research Institute analysis of Medical Expenditure Panel Survey data for individuals with employerbased insurance, 2015; Note: Consumers with chronic disease have problems affecting a single body system such as hypertension and require uncomplicated disease management. Consumers with complex chronic disease live with one or more chronic diseases affecting multiple body systems and requiring complicated disease management. For additional details, see: PwC Health Research Institute, “Preparing future primary care physicians for the New Health Economy,” March 2017 https://www.pwc.com/us/en/health-industries/health-research-institute/publications/pdf/pwc-hri-primary-care-medical-education-new-health-economy.pdf.

(47) Centers for Disease Control and Prevention, “The health effects of overweight and obesity,” accessed June 7, 2019, https://www.cdc.gov/healthyweight/effects/index.html.

(48) PwC Health Research Institute analysis of Medical Expenditure Panel Survey data for individuals with employerbased insurance, 2005 and 2014-16.

(50) PwC Health Research Institute analysis of Medical Expenditure Panel Survey data for individuals with employer-based insurance, 2005 and 2015.

(51) PwC Health Research Institute analysis of Medical Expenditure Panel Survey data for individuals with employer-based insurance, 2005 and 2013-2015.

(54) PwC Health Research Institute consumer survey, spring 2019.

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