Employer Healthcare Strategies


What Will Healthcare Costs Be Like in 100 Years?

Posted by Tatiana Spears on December 30, 2015

What Will Healthcare Costs Be Like in 100 Years? | Tatiana Spears | Employer Healthcare Strategies blog by CareATC, Inc.Employer cost-shifting, greater use of virtual care, and more savvy consumers being guided toward cost-effective healthcare will put downward pressure on health spending in 2016, according to the brilliant minds at PwC.

The recent report from PwC's Health Research Institute — Medical Cost Trend: Behind the Numbers 2016 — also projects U.S. medical inflation will dip to 6.5 percent in 2016, capping a 10-year trend of slowing employer medical cost trend growth in the employer-sponsored market.

While the present “health care century” will probably see more progress in reducing the economic burden of health care, we can’t forget what we’ve learned just even in the last few years. 

Back in 2008, the McKinsey Quarterly estimated that if the nearly 12% healthcare spending growth rate persisted in 2050, most OECD member countries will spend more than a fifth of GDP on healthcare. By 2080, Switzerland and the United States would dedicate more than half of GDP to healthcare – and by 2100 most other OECD countries would reach this level of spending. While the growth rate is projected to dip to 6.5%, this report is still relevant for a very striking observation:

“Even if the excess growth of health care spending over GDP is somehow cut in half, health care would by 2100 be the world’s largest economic sector – and in many countries, the largest economic problem.” 

So, what will have to change to prevent health care from obliterating half of a national economy? Trends shaping the future of healthcare – even now – can be catalysts for reducing the cost of healthcare in the long-term.  Researchers expect that in order for hospitals and health systems to continue bending the cost curve in the next 10 years, the following trends must continue:

  1. Adoption of efficient and effective healthcare technology such as wearable devices

  2. Inclusion of patient engagement tools to make transparency initiatives successful

  3. Continued program innovation to lead to more affordable care options

  4. Increased competition to directly reduce healthcare costs

  5. Chronic diseases management programs to influence healthier lifestyles

  6. Employers taking healthcare cost containment into their own hands by implementing or revamping their on-site health clinics 

We may not know every factor that will influence healthcare costs in the next hundred years, but history is a good teacher. In the midst of continued innovation and successful adoption of technology that reduces barriers to care, political, environmental, and societal factors will continue to influence healthcare costs. From living longer lives and advancements in bio-technologies, to scarcities induced by climate change and policies that influence cost-sharing, varying factors can bring great optimism and great caution.

Whether we look at trends for the next 10 years or the next 100 years, the powerful thing about information is that it can be a source of empowerment. As decision-makers and key leaders, our role is an important one. We’re navigators and influencers that can take large-scale trends and translate them into informed decisions and actionable solutions tailored to our organizations. The key is to stay informed, nimble, and include a wellness strategy that is sustainable.

Tatiana Spears

About The Author

Tatiana Spears

With an MBA mind for analysis and strategy development, Tatiana loves transforming creative ideas into practical application for innovative companies and professionals. She is also the proud owner of an overworked Nespresso machine.

Post Topics Healthcare Cost Containment