LOS ANGELES — Employers can expect to see an
acceleration in health care cost increases in 2012, with expenses rising
8.5 percent next year, according to a study released Wednesday from
PricewaterhouseCoopers.
The 30-page study says that the recession put a lid
on health care costs, which should keep the inflation rate to 8 percent
for 2011, but those price increases are getting steeper as the recovery
gains momentum.
“Now, a few months into 2011, employers and health
plans say utilization remains somewhat deflated, but they’re already
worried about a rebound in 2012,” the study says. “Add to this
recessionary effect the changes brought on by health reform, and the
variables affecting cost trends in 2012 become an interesting blend of
reactions.”
But an 8.5 percent medical inflation rate is a fairly moderate rate.
“These increases aren’t as great as some years,” said
Mike Thompson, a principal at PricewaterhouseCoopers. He noted that
over the past decade, there have been several instances when medical
inflation has exceeded the double-digit mark.
“We do see fluctuation from year to year,” he said.
PricewaterhouseCoopers surveyed 1,700 employers from
30 industries along with hospital executives and health-plan actuaries.
It found that three main factors will drive up medical costs next year.
First, consolidation among hospitals and physicians
is snowballing. While that should increase efficiency, payers worry
about the impact of consolidation on rates. Second, inpatient costs for
Medicare recipients will rise 3.3 percentage points more than hospital
rates. And post-recession stress has taken a toll on worker health.
But the study says that employers are expected to try
to keep a lid on costs between now and next year, and the actual
medical inflation rate for employers should be closer to 7 percent.
It also says that a number of factors will deflate
medical pricing, including cost-sharing by employees through such
vehicles as higher deductibles, brand-name drugs losing their patents
and adding costs to employees who venture out of the health network for
care.
The study also says that spending by insurance
companies has grown the most for outpatient and inpatient care over the
past five years, along with miscellaneous spending. There was slower
growth in drug costs and physician expenses. But inpatient care and
physician costs still comprised the biggest chunk of health expenses,
each with more than 30 percent.
The Patient Protection and Affordable Care Act,
passed in 2010, is expected to have little impact on rates, though it is
pressuring employers to be more cost-conscious about health care.
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