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MSK Forecast Shows Cost Increases in 2021: Goodpath Employer Health Index Results

The COVID-19 pandemic had a massive impact on healthcare. Patients deferred or canceled elective, preventative, and routine care. This reaction drastically changed healthcare costs in 2020 and leads to large changes in healthcare in 2021. 

This impact of COVID-led healthcare changes is particularly acute for musculoskeletal (MSK) conditions. These conditions affect nearly 1 in 2 US adults and account for the largest share of spending on healthcare nationally. MSK spend is a significant driver of self-insured employers’ benefits programs, so accurately predicting and managing these costs is crucial for any benefits program.

GEHI Projects 38% Increase In 2021 MSK Costs

The Goodpath Employer Health Index (GEHI) examines and explains trends, forecasts, or new insights to advance the understanding of employers, brokers, and individuals around conditions that Goodpath treats: MSK, sleep, and digestive health. Prior studies examined the incidence and prevalence trends in sleep and back pain, highlighting that conventional treatment can be insufficient for treating these common and chronic conditions.

This Goodpath Employer Health Index (GEHI) analysis forecasts what MSK spending in 2021 for self-insured employers will be. Given the large percentage of spend that MSK contributes historically and how those costs will only grow, understanding and anticipating increases in MSK costs will allow benefits managers to reduce these costs proactively.

This analysis is based on MSK condition-specific spending prior to 2020, estimates for how 2020 affected MSK spend, and projections for employer spending on MSK in 2021. This analysis concludes that employer-paid MSK treatment spending in 2021 will be at least 31% - 45% greater than in 2019, excluding estimates about net-new MSK cases created by conditions of 2020. The mid-range 38% increase is close to 3x what normal MSK cost increases have historically been.

The complete GEHI Report on MSK Cost Projections for 2021 is freely available here, detailing all inputs and projections.

MSK Spend in 2020

Data on healthcare spending in 2020 is still evolving, with little of it yet reported at the time of publication of this article or the full report on MSK Spend Projections. However, there are two underlying trends in employer spending on health, which caused swings in cost down and up: 

  1. The deferral of non-urgent, elective, and preventative care. The care not utilized in 2020 decreased overall employer spending on healthcare. 

  2. The addition of care for COVID-19, which can add costs not previously seen. 

That down and up nature of spending leads to a range of estimates for total 2020 MSK costs. The contention of this GEHI report though, is that using 2020 as an anchor year for forecasts of 2021 will leave many employers exposed to significant and unplanned MSK expenses to come in 2021.

MSK Cost Projections for 2021

2021 is going to be a crucial planning year for benefits managers. Prior approaches to benefits planning are likely to be insufficient in forecasting if they do not also factor in the dramatic shifts in healthcare caused by 2020.

This GEHI report examines US spending on MSK conditions and estimates what that spending will look like in 2021 for self-insured employers. It breaks down the most critical inputs to forecast on 2021 MSK spending to make planning simple.

There are three significant factors the GEHI report explores to create an accurate prediction of healthcare spending this year:

  1. Deferrals. People frequently deferred elective and other non-essential care in 2020 due to a lack of provider capacity and fear of virus contraction. This care will shift to 2021, increasing overall spend beyond what baseline calculations would have been. 

  2. Severity. Those deferred cases will likely increase in severity, increasing the cost to treat those patients. Factors could include: longer treatment cycles, a higher volume or price of treatments and provider visits (e.g., a surgical intervention that was previously unnecessary), or other reasons.

  3. Increased Prevalence. The pandemic has resulted in most adults working from home, which has had a significant  (but not always positive) impact on our lifestyles. While no exact data is available yet, we anticipate seeing a rise in new MSK conditions, particularly pain, due to poor ergonomic conditions, reduced movement, or injuries from lifestyle changes, among others. 

On a per covered employee with MSK claims basis, this combination of factors can lead to variation in expenses for 2021. These inputs can be converted into an action plan.

Prepare for the new benefits year

Given the large percentage of spend that MSK contributes historically and how those costs will only grow, understanding and anticipating increases in MSK costs will help benefits managers proactively manage them

These spikes in MSK treatment costs make it impossible for companies to maintain the status quo benefit approach. It is critical for employers to mitigate MSK issues now, not just to address the astronomical direct healthcare costs but to treat the entire person and prevent more serious MSK procedures.

Access the GEHI Report on MSK Cost Projections for 2021 freely here. Stakeholders can proactively take steps with the Action Plan also freely available through this link.