After Slowing, Cost Increases Expected to Remain Steady

Health Care Cost Trends: Since 2002, the rate at which health costs have increased has gradually slowed, from a high of 14.7 percent five years ago to 8 percent last year. But that trend is not expected to continue, according to a survey by Watson Wyatt Worldwide and the National Business Group on Health.

The rate of increase is expected to stay at 8 percent through 2008. While the increase is still more than twice the rate of inflation, the survey’s authors suggest that it represents a stabilization achieved by employers who have been able to successfully manage their health care costs.

According to the survey, 82 percent of employers came in at or under their anticipated health care budget. Employers who best managed their costs did so by focusing on the quality of the health care their employees receive and by providing employees with information on health care costs and quality, as well as giving them tools to be able to manage their health and health care costs.