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Small, Midsize Companies See Fastest Rise in Health Care Costs

March 22, 2010
Related Topics: Financial Impact, Benefit Design and Communication, Latest News

Employers’ per-person health care costs accelerated in 2009, with the fastest growth among small and medium-size companies, a newly released survey shows.

Businesses saw health care costs climb 7.3 percent last year to $3,341 per active worker from $3,113 the prior year, said Thomson Reuters, based on proprietary health claims data from 144 companies that insured 9.5 million people between 2007 and 2009.

Employers’ per-person health care costs increased 6.1 percent and 4.7 percent in 2008 and 2007, respectively.

Small and midsize companies saw health care costs increase 9.8 percent and 10 percent, respectively. That’s significantly higher than the 5 percent jump in medical and pharmaceutical spending for small employers in 2008 and the 6.5 percent rise among midsize companies the same year. Small businesses employ less than 5,000 workers, while medium-size companies have 5,000 to 50,000 employees.

But large employers, those with at least 50,000 workers, saw health spending growth slow to 5 percent from 5.8 percent the prior year.

Medical and pharmaceutical spending accelerated, despite fewer hospital visits and prescriptions, the data show. Inpatient hospital and drug prices increased, while rising prices and increased use services fueled an 8.7 percent increase in outpatient costs. 

Filed by Melanie Evans of Modern Healthcare, a sister publication of Workforce Management. To comment, e-mail


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