Medical Cost Trend
The year-over-year rate at which an insurer's per-member medical costs are rising -- roughly healthcare inflation as the payer experiences it, quoted as a percentage (e.g. 7%). It is the number that most directly threatens managed-care earnings, because insurers set premiums a year in advance based on a forecast of this trend; if actual cost trend runs above the assumption baked into pricing, the medical loss ratio climbs and margins compress. Utilization spikes (a heavy flu season, pent-up elective surgery) and drug-cost surges are the usual drivers. It is an issuer-defined estimate, so treat it as directional rather than a hard, cross-company-comparable figure.
Related terms
Accounts Payable · Adjusted EBITDA · Adjusted EBITDA Ex-SBC · ADR · ARPU · Average Length Of Stay
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