Healthcare benefit expenses will slow to single-digit increases in 2008, according to PricewaterhouseCoopers.
Private insurers are anticipating an average increase in medical costs of 9.9% for preferred provider organizations, 9.9% for health maintenance organizations and point-of-service plans, and 7.4% for consumer-directed health plans. That compares with the previous year when medical costs rose 11.9%, 11.8% and 10.7% respectively.
The slowdown in cost increases was attributed to slower spending growth for prescriptions, increased transparency and cost-sharing with employees, total-health management approaches to benefits and greater use of information technology and electronic medical records in healthcare.
Still, healthcare costs are increasing and a reason for concern, according to PricewaterhouseCoopers in a news release, although the gap between national health spending and gross domestic product has been narrowing since 2004. The company also reported it appears that the cost trend for consumer-directed health plans is running about 2.5 percentage points below other health insurance products, although it is too early to evaluate the long-term impact of the high-deductible plans. A full copy of the report is available here. -- by Cinda Becker