Except for the manufacturing sectors for things like medical equipment and supplies, the Producer Price Index, released today, measures reimbursement - changes in the level of payments made by different types of insurers. Until COVID it was mostly affected by seasonal factors and reimbursement policy changes. Since then it has been jacked all around by cost-sharing waivers, payment add-ons and higher acuity in a pandemic and post-pandemic era.
As COVID has receded as a disease and/or a positive test, the payment balance is returning. Patients are assuming more of the responsibility, as we can see with CPI. That means payment balance should be returning to the 80-20 mix as before. That was the direction things were headed in the spring but that was interrupted by the quick spread of the Omicron variant and another uptick in early summer.
September's number is more deceleration that began in June. The big unknown are the rates for 2023 which from all anecdote we have suggests substantial increases in rates which usually means mix shift toward higher deductibles.
Emily Evans
Managing Director – Health Policy
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