Deloitte: The Ills of Inflation May Make Consumers and the Health Care System Sicker
Tuesday, November 15th, 2022
More than 70 million Americans feel unprepared to pay for health care costs in the coming year
Inflation top reason nearly one-third of Americans are concerned about covering unexpected health care needs.
Twenty-eight percent of consumers surveyed, or roughly 72 million U.S. adults based on 2020 U.S. Census data, feel less prepared to pay for routine and unexpected medical costs than they did last year.
Thirty percent of consumers are either "planning" (13%) or "still deciding" (17%) to change their health insurance plans to cut costs for the upcoming 2023 health insurance enrollment.
Twenty-six percent of consumers who don't have a health plan that covers virtual visits intend to change their health plans to accommodate.
Nearly two-thirds of consumers who had virtual health care visits last year cited either convenience (38%) or cost (27%) as the top reasons why they sought virtual health.
Why this matters
From 2001 to 2021, the cost of health care increased faster (3.3%) than the cost of all goods and services (2.2%). With inflation in the United States reaching its highest point in 40 years, many consumers are making difficult choices about household expenses, including whether or not they can afford medical care. These tough trade-offs between choosing to pay for housing or transportation over paying for prescription drugs, or needed medical care can impact their health and quality of life. At the same time, the combination of inflation, a tight labor market, and ongoing supply chain issues is putting financial pressure on hospitals, health systems, and clinicians and these costs could be passed on to the consumer. To understand how inflation is affecting consumers' perspectives on health care spending, the Deloitte Center for Health Solutions conducted two nationally representative consumer surveys. The first survey, the "Deloitte 2022 Survey of U.S. Health Care Consumers" (n=4,545) was fielded between February and March 2022. And the follow-up survey, the "Deloitte 2022 Pulse Survey of U.S. Consumers" (n=2,005), was fielded in September 2022.
The costs of cutting back on health care
Consumers are dealing with economic pressures they weren't facing just one year ago. Prices for food at home rose 12.2% between 2021 and 2022, the largest increase since April 1979. Energy prices rose 41.6 % over the same time, the largest 12-month increase since April 1980. With prices rising in other areas of consumers' lives, one likely outcome is they'll have less money available for health care needs. Based on this recent survey data, Deloitte finds that concerns about inflation are already impacting consumers' health care decisions.
Twenty-six percent of consumers who don't have a health plan that covers virtual visits intend to change their health plans to accommodate. Nearly two-thirds of consumers who had virtual health care visits last year cited either convenience (38%) or cost (27%) as the top reasons why they sought virtual health. In response to rising expenses, some consumers are delaying routine care, cancer screenings, preventive care, and other essential medical needs. Delays in routine care can exacerbate health issues and could eventually force people to turn to high-cost settings (e.g., the emergency room), especially when minor health issues turn into major ones. In parallel, cases of COVID-19 have taken a toll on patients, particularly those with, or at risk for, chronic diseases. These costs — some of which could be prevented — might ripple through the health care ecosystem and push future health care spending higher.
"The convergence of inflation with the demands from today's empowered health care consumer may be the catalyst for industry change that propels us toward virtual and digital health options that are designed to be more convenient, affordable and accessible. This will require rethinking how services are delivered, how consumers can be empowered to take control of their health earlier and more proactively. This can accelerate transitioning to new models of screening, prevention, care and cure that we call the 'Future of Health.'"