Healthcare Costs Level Out; Still Outpace Wages & Inflation

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Despite significant gains made under the Affordable Care Act (ACA), Latinos still remain the largest uninsured population in the country. A lack of access to health care has been one of the most persistent causes of health inequity for many Latino families.

One of the main barriers to access is often the cost associated with health insurance. A new report has determined that the costs for healthcare may have leveled off, but that is not necessarily a positive.

According to a report from PricewaterhouseCoopers’ Health Research Institute (HRI), a “new normal” for medical costs has been determined. The HRI expects the medical cost growth to be 6.5% from where it is this year for 2018.

“Even with net growth rate expected to hold at 5.5% for next year, [due to likely changes in benefit plan designs], that’s still growing faster than general inflation,” said Ben Isgur, director of HRI, in an interview Healthcare Dive. “[That’s] outpacing wage growth for employees.”

Overall inflation is one of the major reasons why medical costs rise. According to the HRI, inflation affects hospital spending. Labor markets “tighten” while living wages rise.

“So much of a hospital or delivery systems’ expense is labor costs,” Isgur said. “We think inflation is going to have a big effect on medical cost trends in 2018.”

The rising costs that do not coincide with higher wages, especially for many low-income Latinos, might keep them from attaining and or using health care resources.

“As labor costs continue to account for over half of providers’ budgets, providers should consider how to make the most of their staff’s skills and productivity,” the report said.

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By The Numbers By The Numbers

24

percent

of U.S. public school students are Latino.

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