Boca Raton, FL – NCCI recently announced the release of the Q2 2018 edition of its Quarterly Economics Briefing, which examines the current state of the economy and implications for workers compensation insurance, and is separated into two sections: “Review of Current Conditions”, and “Drilling Down”
Review of Current Conditions
Key takeaways include:
- Employment growth in 2017 and projected growth for 2018 are holding at just under 2%, and the unemployment rate has continued to decline to a historic low below 4%.
- Estimated wage growth bounced back to 3.4% in 2017 (from 1.2% in 2016), similar to growth rates during 2014–15 and above earlier projections for 2017. Wage growth is expected to increase further in 2018 and 2019.
- Medical inflation is expected to increase from 1.4% in 2017 to above 2% in 2018 and is projected to continue to rise in 2019.
- Short-maturity interest rates rose 25 basis points, and long-maturity interest rates rose 11 basis points in the last three months. This has continued the flattening of the yield curve observed over the past year.
Click here to read the full QEB: NCCI: Q2 2018 Quarterly Economics Briefing
Drilling Down: The Impact of Hospital Consolidation on Medical Costs
- Healthcare consolidation improves integration of care and reduces duplication of clinical services. Hospital mergers can lead to operating cost reductions for acquired hospitals of 15%−30%.
- Reductions in hospital operating costs do not translate into price decreases. Research to date shows that hospital mergers increase the average price of hospital services by 6%−18%.
- For Medicare, hospital concentration increases costs by increasing the quantity of care rather than the price of care.
- In addition to mergers, hospitals are also buying up provider practices. Between 2015 and 2016, hospitals acquired 5,000 physician practices.
- For workers compensation, hospital consolidation is likely to affect both the quantity and price of medical services. Forthcoming NCCI research will investigate the effect of hospital consolidation on prices and utilization of medical services in workers compensation.
Click here to read the full “Drilling Down” brief: NCCI: The Impact of Hospital Consolidation on Medical Costs