Employers expect health costs to rise: survey

Many of the nation's largest employers expect their healthcare costs to rise by an average of 7.2% next year, despite their increasing use of a variety of cost-control measures, according to a National Business Group on Health survey released today.

Next year's expected increase is slightly less than the mean rise of 7.4% in healthcare costs that those companies reported for this year, although the coming increase is greater in absolute dollars, according to Helen Darling, president and CEO of the NBGH.

The annual survey by NBGH, a not-for-profit alliance of the 83 of nation's largest companies—employing over 4 million workers—found they expect healthcare costs to continue rising significantly faster than inflation because of medical inflation and provisions of the Patient Protection and Affordable Care Act.

“This is an unsustainable model for our country,” Darling said at news conference Thursday about the financial strain of the ongoing increases.

The rising healthcare costs found in the annual summer survey that stemmed from components of the 2010 federal healthcare law, including its mandate to cover the offspring of workers up to age 26 and its coming bans on caps for annual benefit limits.

Employers reported a variety of cost-saving moves to counter the rising cost of their health coverage, including encouraging employees to use centers of excellence for transplants and other procedures.

“Even if they spend more on the initial admission, they spend less overall due to less need for readmission or retreatments,” Darling said about incentivizing employees to seek treatment at highly rated hospitals.