5 trends in physician services payments — Why growth will slow in the next decade

Written by Laura Dyrda | February 16, 2017 | Print  |

Over the next decade, physician services payments are expected to have slower growth as focus shifts to lowering the cost of care, according to a Medscape report

Here are five quick trends:

1. Healthcare spending grew 4.8 percent in 2016, lower than the 5.8 percent in 2015. The spending on healthcare grew as more people received access to health insurance under the ACA; it's unclear how an ACA repeal or replacement potentially leaving millions uninsured will impact healthcare spending.

2. Physician services spending grew 6.6 percent last year to $677 billion, up from the 6.3 percent increase in 2015. However, prices for physician services increased 0.2 percent in 2016, but still more than the 1.1 percent decrease in 2015.

3. From 2014 to 2016, the medical price inflation was -0.2 percent, a low rate that is expected to rebound due to overall inflation.

4. Physician services spending is expected to drop 5.9 percent from 2018 to 2025 and then drop 5.5 percent in 2025 due to cost-sharing strategies and high-deductible health plans. Cost reduction tools like prior authorization will also contribute to the drop.

5. Medicaid spending grew 9.7 percent in 2015 due to an increase in enrollment after the Medicaid expansion. However, growth was 3.7 percent in 2016 and is expected to be back on track next year. Medicare spending growth was below the national average last year, but is expected to increase in 2017 with more spending on physician and hospital services.

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