A projected 7.5 percent rise in costs would normally produce steam rising from corporate foreheads. But when that cost is health care, it’s almost...

A projected 7.5 percent rise in costs would normally produce steam rising from corporate foreheads.

But when that cost is health care, it’s almost a reason to applaud.

An industry research report released Thursday said the cost of health care services, including physician visits, medical procedures and prescription drugs, is expected to rise 7.5 percent in 2013.

That’s still more than three times the projected rates for inflation and economic growth. But it’s a big break from past years when health costs rose by double-digit rates annually. And it mirrors similar estimates seen since 2010, the Associated Press reported.

The projected increase for 2013, called the medical cost trend, is the primary factor in setting health insurance premiums, according to PricewaterhouseCoopers (PwC), which issued the research report.

Health insurers and large employers use this figure to estimate what the same health plan would cost in the following year.

But premiums for large employer-sponsored health plans may increase by only 5.5 percent as a result of wellness programs and a growing trend toward plans that impose higher insurance costs on workers, PwC said, according to a Reuters report.

PwC’s Health Research Institute based its research on input from health plan actuaries, industry leaders, analyst reports and employer surveys.

“We’re in the early beginnings of a shift toward consumerism in health care,” said Ceci Connolly, the health institute’s managing director, as reported by Reuters.

Part of the consumerism can be seen in the growth of high-deductible health plans. America’s Health Insurance Plans, an industry trade group, said this week that enrollment in health savings accounts grew 18 percent this year as employers continued to steer workers into high-deductible medical plans.

Connolly said health plans with higher deductibles and co-pays for workers tend to discourage unnecessary purchases and offer lower premium costs for employers.

Successful wellness programs can reduce the need for medical services, she said.

More than half of the 1,400 employers surveyed by the PwC firm are considering increasing their employees’ share of health benefit costs and expanding health and wellness programs in 2013.

The PwC report also cited the increased use of generic drugs and greater price transparency in medical services as reasons for  more moderate health cost inflation.

“Moving health care cost inflation closer to general inflation is good news,’’ said Bill Custer, a health insurance expert at Georgia State University, when asked to comment on the report.

Custer said there may be several factors besides high-deductible plans that are taming health care inflation. Those include more emphasis on preventive care, more tools to help workers be healthy, and more medical services being integrated instead of delivered in a fragmented way.

Private insurers are now rewarding physicians who have created “patient-centered medical homes’’ for primary care, as well as encouraging consumers to make price comparisons for imaging services. Disease management programs have also spread.

“People with chronic diseases may be managing their diseases better,’’ Custer said. The 2010 health reform law has emphasized many of these strategies, he added.

Long-term unemployment and the recession may also be decreasing demand for medical services, Custer said.

The PwC report said two factors will nudge medical costs upward next year. First, patient use of medical services is expected to rise as the economy strengthens. Second, medical advances will drive growth in high-cost care and catastrophic claims.

PwC’s projection of 7.5 percent growth is nearly double a 3.9 percent rise in health spending that the federal government says occurred in 2010, the last year for which official figures are available, Reuters reported.

The government survey includes Medicare and Medicaid spending, as well as over-the-counter pharmacy purchases, while PwC’s report focuses on the private insurance sector of the $2.6 trillion health care system.

Michael Thompson, a principal in PwC Human Resources Services, told AP that he thinks health care spending has entered a “new normal,” where it will continue to climb, but not as much as it did before the recession.


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Andy Miller

Andy Miller is editor and CEO of Georgia Health News

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