Lower spending on prescription drugs and increased
cost-sharing with employees are expected to lower the growth rate of medical
spending in 2008, a sign that premium increases may decline as well, according
to data released Tuesday, June 19, by PricewaterhouseCoopers.
The driving force behind the drop is patients’ increased
sensitivity to price. Employers have achieved this by sharing more of the cost
of medical care with employees. They have also focused on managing the health of
employees to prevent disease and encourage healthy lifestyles through health
coaches and disease management.
“The causes for the
current deceleration are complex,” according to the report’s authors, “but it’s
clear that the movement into consumerism is real and is affecting medical
costs.”
The use of electronic medical records is partially responsible for the
slowing of medical cost increases.
Though a drop in medical cost growth does not necessarily
mean a decline in premium growth, the past few years have seen just
that.
This year, medical costs at health maintenance organizations,
for example, are expected to increase 9.9 percent, compared with an increase of
11.8 percent last year. Consumer-directed plan costs increased 7.4 percent,
compared with 10.7 percent a year earlier.
Premium growth rate, meanwhile, has dropped every year since
2003, when premiums rose 13.9 percent nationally. In 2006 and 2007, premiums
increased 7.7 percent.
Medical cost trends for employers are a combination of
factors: how much medical care costs; how much medical care patients seek; and
how much of the cost employers shift to employers.
—Jeremy Smerd
= Member Only
