For the first time in its history, the Milliman Medical Index (MMI), released last month, found that health care costs decreased year over year, with the restated 2020 MMI value 4.2% below Milliman’s 2019 MMI. All categories of care, except prescription drugs (with and without rebates), are lower. As employers have experienced, care forgone during the pandemic more than offset the cost of COVID-19 testing and treatments.

In the early months of the pandemic, concern arose over the long-term impact of delayed and forgone care. While it is too soon to fully understand the clinical consequences, Milliman suggests that much of the deferred care may actually have been eliminated, noting that lifestyle and care access changes ushered in by the pandemic may have reduced short-term health care needs. Social distancing practices led to an uptick in utilization of digital health, telemedicine, and mail order pharmacy services, which also likely contributed to overall lower utilization of other services. Yet, the potential for increased utilization driven by pent-up demand for treatment of ongoing disease conditions lingers.

The MMI reports that the 2021 cost for a hypothetical American family of four in an employer-sponsored PPO plan is $28,256. The cost represents a projected growth of 8.4% over 2020, a rate higher than seen in many years. A forecasted rebound in health care utilization and continued uncertainty drive this trend. Vaccine rates and efficacy, increased demand for care, changes in work routines and personal health behaviors, public health and provider response and practices, and the prevalence and effectiveness of care management in the months ahead all contribute to this uncertainty. Ensuring convenient and affordable primary care access and coordinating care to leverage employees’ new-found health habits are important opportunities for employers to realize a flatter cost trend while supporting better health.

Cost varies by the population and region. Milliman offers an interactive tool that employers can use to create a MMI for various metro areas and their average family definition. The table included below compares the projections for St. Louis and several other metro areas where BHC members have employees.

The BHC will continue to monitor local and national trends and looks forward to hearing from members on their successes and experiences. The BHC has also hired Milliman to analyze Midwest Health Initiative (MHI) data and provide St. Louis market and provider-specific spending and cost trends for 2020 and the preceding years. Output is being planned for fall 2021. The BHC is eager to share these results with members and to engage with health plan and health system leaders on shared opportunities to realize better population health and lower health care spending trends.

Warm Regards,

Louise Y. Probst

BHC Executive Director