Health care cost growth will slow down, per Aon Consulting report
12 08 08 - 11:12
Health care cost growth expected to slow
Victoria Colliver, Chronicle Staff Writer
A new survey predicts that health care costs will increase more than 10 percent next year, a rate that - while it far outpaces inflation - is significantly lower than similar hikes in recent years.
A report released by Aon Consulting Worldwide estimates employers will spend about 10.6 percent more in 2009 for the same health benefit package they're offering this year. This price bump is similar to last year's, but a far cry from increases of 15 percent and 16 percent in 2001 and 2002.
Aon officials said employers likely will be able to reduce their actual costs by three or four percentage points by using a variety of techniques such as employee wellness programs and disease-management programs.
"What we are seeing is a little bit of a shift away from pure cost shifts to employees," said Bill Sharon, Aon Consulting senior vice president and director of the study, referring to such tactics as requiring employees to pay a greater share of their health premiums and higher co-payments. "That kind of stuff is still happening, but to a lesser extent."
Aon's findings mirror a similar study released late last month by PricewaterhouseCoopers, which estimated a nearly 10 percent increase in health costs for next year. The study pointed out that the percentage rate of increases has diminished each year since 2003 and attributed some of the deceleration to similar cost-saving programs, including those that encourage people to select generics over brand-name drugs.
Despite the relative moderation, some troubling trends continue. For example, PricewaterhouseCoopers determined cost shifting from the uninsured, in addition to underpayments from government programs such as Medicaid and Medicare, will account for nearly 1 in every 4 dollars spent by private payers in 2009.
Meanwhile, the population continues to age, and the economy is straining a country that already is spending more than 16 percent of its entire economy on health care.
"The fact we're having this debate of who has to pay more because someone else is paying less is symptomatic of the many deep flaws in our health care finance system," said Marian Mulkey, senior program officer for the California HealthCare Foundation.
Mulkey said the Aon survey, which did not provide individual state projections, shows "slow grinding declines in access to health care" rather than any dramatic shifts.
While supporting the benefits of employee wellness programs, Mulkey doubted they would contribute to short-term premium reductions.
Consulting firms like Aon and PricewaterhouseCoopers offer such benefit design changes, including wellness programs and consumer-driven health care plans, which shift more of the decisions about how to spend each health care dollar to the employee.
In conducting the study, Aon surveyed more than 70 health care insurers representing more than 100 million insured people. Nearly 60 percent of Americans receive health coverage through their employers.
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