What is trend?

Health plan cost trend is the measure of increases in allowed per capita claims cost. Allowed per capita claims cost is eligible billed charges (before participant cost sharing) less provider discounts.

Although there is usually a high correlation between a trend rate and the actual cost increase assessed by a carrier, trend and the net annual change in plan costs are not the same. A plan sponsor’s costs can be significantly different from projected claims cost trends.

Key health plan cost trend survey findings

In addition to the high projected prescription drug trend noted above, key survey findings about the coming year’s trend projections include:

• Per-person cost trend for open-access PPO/POS plans is projected to be 6.8 percent.
• Specialty drug trend is projected to be 14.5 percent. Drivers of projected specialty drug trend are primarily due to utilization of new high-cost specialty drugs replacing lower-cost therapies. Utilization changes account for almost 60 percent of the specialty drug gross cost trend increase before rebates.
• Price inflation is still the primary driver for inpatient hospital, physician and overall Rx trends.
• Diabetes, autoimmune disease and psoriasis have been the top three disease indications for prescription drugs over the past few years. However, over the last two years, anti-obesity medications and drugs to treat migraines showed the greatest growth.
• Trend projections for most dental coverages are expected to reach 4 percent.
• Projected vision trend is 2.8 percent for reasonable and customary plans.
• Medical trend projections for Medicare-eligible retirees with Medicare Advantage PPO plans is forecast to be 4.9 percent.

Get the survey report

In addition to presenting trend projections and trend drivers, the 37-page report:

• Evaluates historic trends, including data from Segal’s health data warehouse, SHAPE (Segal’s Health Analysis of Plan Experience)
• Covers utilization of telehealth services
• Examines utilization of mental health services and the impact on trend
• Addresses the rising cost of more effective and expensive new drug therapies than previous treatments, such as diabetes and obesity drug treatments with the glucagon-like peptide-1 receptor agonist (GLP-1) mechanism
• Compares the top health plan cost-management strategies plan sponsors are using this year, as identified by the survey respondents, to last year’s top five
• Discusses those and additional cost-management strategies in detail

Our approach to healthcare cost management

We recommend a balanced, three-pronged approach to effective healthcare cost management. It involves managing plan design/networks, vendors and population health. Data analytics are central to supporting each of those cost-management strategies.