Report predicts moderate health care spending rise

AP News
Posted: May 31, 2012 12:55 PM
Report predicts moderate health care spending rise

Health care spending in the United States is expected to continue climbing at a more moderate pace next year, and that may help contain hikes in the price of insurance coverage for people with employer-sponsored plans.

The cost to deliver health care _ which counts spending on everything from doctor visits to prescriptions or surgeries _ will climb 7.5 percent per person in 2013, according to a study from the Health Research Institute of benefits consultant PwC. That falls below the 10 percent annual growth seen before a severe recession made consumers very choosy about how they spend their money.

But it fits within an estimate range of 7 percent to 7.5 percent seen since 2010. Next year's increase could wind up being 5.5 percent after employers and insurers adjust the coverage they offer.

That would still be higher than inflation. Over the past 12 months, core U.S. consumer prices, a measure that excludes food and gas costs, have risen 2.3 percent.

PwC says the slower growth rate reflects the sluggish economy, lower use of services by patients and efforts by employers to hold down costs.

Employer-sponsored health insurance is the most common form of coverage in the United States. For a few years now, many companies have been asking their employees to pay larger shares of premiums or the cost of coverage.

They've also had them pay higher co-payments or deductibles out of pocket, and they've made health care cost information more available to consumers. That can push patients to spend less by putting off care or shopping for a better deal.

"That's helped to mitigate the increases in costs we've seen historically," said Michael Thompson, a principal in PwC Human Resources Services.

PwC also said patients will help deflate costs next year by visiting retail health clinics instead of more-expensive primary care doctors, and drug spending will fall as generic medicines are substituted for pricier brand-name pharmaceuticals.

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On the flip side, an expected increase in health care use and medical and technological advances in care are expected to increase spending.

Even so, Thompson said he thinks health care spending has entered a "new normal," where it still climbs but not as much as it did before the recession.

Employers consider spending trends when they start thinking about pricing health care coverage for the new year, and many companies are doing that now for coverage that will start Jan. 1. Moderate spending growth could contribute to moderate increases in premiums or the cost of coverage.

But that also can depend on the company's size, the type of insurance it offers and the health of the employees, among other factors.

The PwC study involved a survey of about 1,400 companies and interviews with health plan actuaries and other executives. PwC Human Resource Services is a practice within PricewaterhouseCoopers LLP.