By 2040, 60% of healthcare spending will go to improving health and well-being, according to Deloitte.
Healthcare spending will reach $8.3 trillion by 2040, according to a Deloitte report released Monday morning.
While government projections for healthcare spending center around growth at 5.3% per year, Deloitte predicted a $3.5 trillion difference of freed up healthcare spending or a "well-being dividend" as the report stated.
Deloitte attributed the projected rise in healthcare spending to the anticipated increase in "digital technologies including real-time biometric sensing, apps, wearables, and digital nudging."
By 2040, 60% of healthcare spending will go to improving health and well-being, according to Deloitte, as activities related to health and well-being are expected to account for around two-thirds of spending.
"We anticipate that emerging technologies, an ability to cure and prevent disease (or detect disease in the earliest stages), and highly engaged consumers will lead to a deceleration of health spending between now and 2040," the report stated. "While our actuarial models are based on pre-pandemic data, we anticipate spending growth will continue to decelerate."
According to the most recently available data from the Office of the Actuary at the Centers for Medicare & Medicaid Services (CMS), U.S. healthcare spending hit $3.8 trillion in 2019, growing 4.6%.
The Deloitte report broke down how its projections are likely to impact various healthcare stakeholders.
- Industry participants:
- The report stated that "clear winners and losers" will emerge, namely around the ability to evolve an existing business model and make investments that empower consumers.
- "Organizational leaders should rethink their capital investment strategies, examine the workforce needs of the future, and reframe regulatory requirements from a compliance function into potential market opportunities," the report stated.
- New entrants:
- Non-traditional players, specifically technology and retails companies, have opportunities to make inroads in a changing industry.
- The barriers to entry have been lowered due to regulatory policies that promote "increased data sharing, transparency, and interoperability."
- The report encouraged lawmakers to support policies that ensure the healthcare system reaches the future quickly.
- "Government and policy leaders should anticipate and respond to regulations and requirements that keep up with technological advancements and new consumer expectations," the report stated.
- Consumerism continues to be a defining force in the evolution of care delivery, the report found.
- Deloitte indicated that consumers will be a driver for more personalized care options, such as for behavioral health or the social determinants of health.
While Deloitte released projections for long-term healthcare spending patterns, the medical cost trend is expected to rise again in the short-term.
A survey released by PricewaterhouseCoopers last summer estimated that the medical cost trend for 2021 would be between 4% to 10%.
Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.