Viewing entries tagged with 'Providers'
ICYMI: The Milliman Medical Index -- Costs Keeping Rising
Posted by The Campaign on May 12, 2010 at 10:04 AM
Everyday seems to bring to light new information about rising health care costs and the impact of the new health care reform law on costs (HINT: It is going to increase them.) The latest information comes from the Milliman Medical Index, an annual report that shows "total annual medical spending for a typical American family of four covered by an employer-sponsored preferred provider organization (PPO) program."
The report provides further evidence that health care costs continue to rise at an unsustainable rate and are being driving by soaring prices for medical services.
Here are some nuggets from the report:
"Increasing healthcare costs remain a challenge for both employers and employees and are largely driven by increases in the underlying cost of care."
"The 2009 to 2010 hospital inpatient annual rate of increase grew from 7.7% to 9.8%. Most of the inpatient annual rate of increase is driven by average unit costs; we are seeing very little change in utilization. The hospital outpatient annual rate of increase grew from 10.2% to 11.6%, mostly because of increased average unit costs. Hospital outpatient care is the area of highest growth for the second year in a row."
"Most of the hospital and physician cost increases identified in this year's MMI have been driven by average unit cost, not utilization, which frames the coming effort to control costs. Provider/payor negotiations will be more visible and intense in the reform environment and as regulators put more pressure on the premium rate-setting process."
"Only about 17% of this year's increase in pharmacy spending is due to increased utilization, and the other 83% of the increase is due to average unit cost increases."
"While employers are making the immediate changes required to their benefit plans and adapting their longer-term benefit strategy to the new regulatory environment, healthcare costs continue to increase at rates exceeding most other costs of doing business."
"Efforts to enforce insurance rate controls may have indirect impact on the growth in healthcare costs but still do not address the underlying cost of care."
"While underlying cost drivers as yet remain relatively unchanged, there are some changes that will have a predictable effect on cost. The most immediate changes, such as increasing dependent coverage up to age 26 and elimination of lifetime and annual benefit maximums, will cause a direct shift in costs from employees to employers."
To read the whole report, click here.
ICYMI: The New York Times on the Need to Bring Down Underlying Medical Costs
Posted by The Campaign on April 21, 2010 at 5:49 AM
With each passing day, there seems to be a greater and greater recognition of the fact that health care costs are growing out of control. And it is these costs that are driving the icnreases in premiums. Thus if the country is going to get premium growth under control it has to design a strategy to get these underlying costs under control.
The New York Times picks up this line of argument today in its editorial "Health Care Reform and Massachusetts." First, the NY Times recognizes that premium caps are "a short-term fix."
The editorial goes on to argue:
"Like the rest of the nation, the state needs to deal with the underlying issue: the relentlessly rising prices charged by health care providers. Those are driven in part by costly new technologies and treatments. In Massachusetts, it is exacerbated by the outsized bargaining power of prestigious teaching hospitals and regionally dominant community hospitals."
This argument follows closely to the points made by AHIP in yesterday's hearing in front of the Senate HELP Committee. The Committee held a hearing on premium increases. The New York Times covered the hearing and picks up AHIP's point of view here:
"Congress, [AHIP's President and CEO Karen Ignagni] said, has largely ignored the cause of rising premiums: the explosive growth of medical costs and the power of hospitals and other health care providers to dictate prices. Ms. Ignagni said the law imposed new requirements, taxes and fees on health plans, which could further drive up costs."
