Although the rate of increase has been dropping for four years, health care costs for employers are still projected to rise 6 percent in 2007. That increase, which is two thirds higher than the Consumer Price Index (the change in the price paid by consumers for a representative basket of goods and services), will affect businesses trying to maintain adequate coverage for their employees — and make medical coverage increasingly burdensome.

Based on these projections, the annual cost per employee will approach $9,000 next year, according to the Towers Perrin 2007 Health Care Cost Survey. Average premium increases will amount to $518 per employee; employers will pay an increase of $374 per employee, and employees on average will pay $144 more in 2007.

"While it is good news that 2007 will be the fourth year of decline in overall average rate of increase, it is definitely not a signal that pressures are abating or that companies can sit back and expect rates to continue this downward trend," says Dave Guilmette, managing director of the Towers Perrin health and welfare practice.

While many companies are taking steps to help their employees manage the growing costs, the fact remains that year after year, employee contribution increases are taking their toll on employees as well as employers. As a result, employers are becoming increasingly concerned about growing numbers of active employees who are opting out of coverage entirely.

Working people are getting priced out of the health care system, says Guilmette.

Source: Towers Perrin 2007 Health Care Cost Survey

CHARTS BY JULIE RIDGE

Managed Care’s Top Ten Articles of 2016

There’s a lot more going on in health care than mergers (Aetna-Humana, Anthem-Cigna) creating huge players. Hundreds of insurers operate in 50 different states. Self-insured employers, ACA public exchanges, Medicare Advantage, and Medicaid managed care plans crowd an increasingly complex market.

Major health care players are determined to make health information exchanges (HIEs) work. The push toward value-based payment alone almost guarantees that HIEs will be tweaked, poked, prodded, and overhauled until they deliver on their promise. The goal: straight talk from and among tech systems.

They bring a different mindset. They’re willing to work in teams and focus on the sort of evidence-based medicine that can guide health care’s transformation into a system based on value. One question: How well will this new generation of data-driven MDs deal with patients?

The surge of new MS treatments have been for the relapsing-remitting form of the disease. There’s hope for sufferers of a different form of MS. By homing in on CD20-positive B cells, ocrelizumab is able to knock them out and other aberrant B cells circulating in the bloodstream.

A flood of tests have insurers ramping up prior authorization and utilization review. Information overload is a problem. As doctors struggle to keep up, health plans need to get ahead of the development of the technology in order to successfully manage genetic testing appropriately.

Having the data is one thing. Knowing how to use it is another. Applying its computational power to the data, a company called RowdMap puts providers into high-, medium-, and low-value buckets compared with peers in their markets, using specific benchmarks to show why outliers differ from the norm.
Competition among manufacturers, industry consolidation, and capitalization on me-too drugs are cranking up generic and branded drug prices. This increase has compelled PBMs, health plan sponsors, and retail pharmacies to find novel ways to turn a profit, often at the expense of the consumer.
The development of recombinant DNA and other technologies has added a new dimension to care. These medications have revolutionized the treatment of rheumatoid arthritis and many of the other 80 or so autoimmune diseases. But they can be budget busters and have a tricky side effect profile.

Shelley Slade
Vogel, Slade & Goldstein

Hub programs have emerged as a profitable new line of business in the sales and distribution side of the pharmaceutical industry that has got more than its fair share of wheeling and dealing. But they spell trouble if they spark collusion, threaten patients, or waste federal dollars.

More companies are self-insuring—and it’s not just large employers that are striking out on their own. The percentage of employers who fully self-insure increased by 44% in 1999 to 63% in 2015. Self-insurance may give employers more control over benefit packages, and stop-loss protects them against uncapped liability.