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Rise in Healthcare Costs Doubles That of Inflation

The findings of an expansive study on healthcare costs conducted by PriceWaterhouseCoopers were released today, revealing the annual increase in the cost of health care is almost twice as high as the rise in the nation’s overall rate of inflation.

The study analyzed data from 500 healthcare-coverage plans and employers, with a combined scope that covers about 11 million Americans.  The study indicates a 9.9% rise in medical expenses for 2008 and predicts another rise, of 9.6%, for 2009.  Dr. David Chin, of PriceWaterhouseCoopers’ Health Research Institute, calls for careful monitoring of all medical costs, from the employer to the insurer to the healthcare provider, in order to keep costs stable enough to avoid double-digit rates of price increases.

Two issues of note that are thought to drive the price increase are:

• A building boom.  Hospitals are expanding, replacing outdated facilities, building outpatient treatment centers, and adding private rooms.
• Cost-shifting from the insured to the uninsured.  Federal medical programs such as Medicare and Medicaid are underfunded and fewer people have private insurance than in recent years.

To minimize healthcare expenses to employees, many employers reported to the research team that they have increased the number of wellness, prevention, and disease-management programs available to their employees.  Doing so is said to improve employee health, which helps to raise productivity.

Source: Associated Press

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