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8% Rise in Health Costs Foreseen

 

Employers do not expect a decline in the rate of health benefit cost increases any time soon.  Median increases for health care costs will remain at 8 percent in 2007; Employers expect cost increases to stay at 8 percent through 2008.  The survey of 573 large U.S. employers reveals.

 

Year

Percent Increase

2008

8.0% (projected)

2007

8.0% (projected)

2006

8.0%

2005

8.5%

2004

10.6%

2003

13.0%

  

According to Watson Wyatt, "The rate at which health care costs are increasing may be stabilizing, but it is still three times higher than the annual rate of inflation overall…  With no reduction in cost increases, it becomes even more important to engage employees to carefully consider health care choices and make the most of health care dollars.  And while investing in education programs, communication and infrastructure will not change behavior overnight, it will produce returns in the long run.”

 

Many employers are implementing creative solutions in an effort to improve employee health and stem costs long-term. For instance, of surveyed companies:

 

  • 78 percent (more than two thirds) offer a nurse line.

 

  • 72 percent offer health risk appraisals.

 

  • 42 percent are implementing programs that focus on reducing obesity among employees.

 

Some employers also are seeking to improve employee health by providing easy access to health care. For example:

 

  • 23 percent have opened on-site medical clinics at some locations.

 

  • 14 percent have opened on-site pharmacies.

 

 

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