This week's news that healthcare spending by consumers continues to grow at historically low rates is likely to continue according to the PwC Health Research Institute.
This week, the Centers for Medicare & Medicaid Services released its analysis of a report showing a 3.9% rate of healthcare spending growth in 2011. That's the lowest rate of growth recorded.
On the HHS blog, Kathleen Sebelius, secretary of Health and Human Services marked the milestone by noting, "That's the same rate of growth as in 2009 and 2010, and in all three years spending grew more slowly than in any other year in the 51-year history of the report."
Sebelius also went on to write that provisions in the Patient Protection and Affordable Care Act (PPACA) could help continue the slow growth trend, but Ceci Connolly, managing director of PwC Health Research Institute, says healthcare spending is down because of the recession and the subsequent weak recovery from the recession.
While such a cause and effect relationship may be reversed as the economy gets stronger, changes in consumer behavior over the last few years are likely to be more entrenched and part of the so-called 'new normal,' says Connolly.
"The growth in the use of retail clinics has gone from about 7.5% in the year 2007... to 24% in 2011," she says. "They're shopping around looking for better prices and better value."
Consumerism is changing the healthcare marketplace. Not only are retail clinics becoming a more popular place for healthcare (flu shots, anyone?), but one payer, Florida Blue, is selling its services in retail stores.
PwC's Health Research Institute has just issued a report listing the "consumer revolution in health coverage," as the number two issue to watch in 2013. It's second only to states getting prepared for health insurance exchanges this year, which, according to Connolly, will be a "sprint year," for payers who are ramping up for the exchanges quietly.
"We know from our work that a lot more is happening than is necessarily publicly announced and advertised right now," she says.
"A lot of these companies have been doing an enormous amount of preparation quietly behind the scenes, they were waiting for the Supreme Court ruling, they were waiting for the election results, they've been waiting to see some different rules and regulations, but they've been preparing and developing their plans and their strategies, and the infrastructure needed, and the personnel and a lot of that. So much more activity has taken place than perhaps is obvious."
Another factor slowing the growth of spending that is likely permanent comes as a result of physicians and physician groups joining hospitals as employees. Giving up their independence also means giving up physician preference purchasing.
"As more physicians are coming on staff at hospitals, they don't have that prerogative, so now the hospital can say we're buying one kind of stent, one kind of scalpel, one kind of pacemaker and [the hospital] can negotiate for a better price. That's one of the factors we identified as slowing growth," says Connolly.
Connolly says other factors are delay of care because it's too expensive and transparency laws that require consumers to see pricing and medical costs.
"It all adds up to flat growth rate at the moment," says Connolly, who also predicts the trend will continue through 2013. And what about next year?
"It's a little less clear what's going to happen in 2014 in part because of the new law is fully implemented," says Connolly. "We know it's going to increase total spending... but we don't know if the growth trend will actually alter."
Jacqueline Fellows is a contributing writer at HealthLeaders Media.