ANN ARBOR — Medical and pharmacy costs for employees and their dependents rose 4.6 percent from 2010 to 2011, the smallest increase in the past five years, according to Truven Health Analytics, formerly the health care business of Thomson Reuters.
The new report, US Employer Benchmarks and Trends, uses real world insurance claims data for 340 large U.S. employees representing 18.3 million covered lives to track health care costs over the past five years and make predictions for 2012 and 2013.
The research also projects that allowed amounts will continue to grow at a moderate rate of 4 to 5 percent in 2012 and 2013.
The relatively modest 2011 cost trend of 4.6 percent reflects the impact of the federal Patient Protection and Affordable Care Act and Mental Health Parity regulations effective in 2011.
The report found the following key factors:
• Extension of Dependent Coverage: The extension of dependent coverage through age 26 for unmarried children accounted for 1.4 percent of the overall 4.6 percent increase in employer health care costs. The lower-than-average health care costs for individuals age 19-26 beginning coverage in 2011 had the effect of reducing overall average per member costs by 0.2 percent. * Preventive Services Coverage: The PPACA requirement to cover more preventive services has resulted in a 3.8 percent increase in physician’s office visits for preventive care. This modest increase may be reflective of the generous preventive coverage offered by many large employers prior to PPACA. * Mental Health Parity Regulations: Roughly 0.4 percent of the 4.6 percent 2011 health care cost trend was driven by an increase of 13.7 percent in Mental Health and Substance Abuse services due to the Mental Health Parity and Addiction Equity Act of 2008.
Additional data covered in the report includes: the impact of pay-or-play strategies on employer healthcare costs, branded and generic prescription drug trends, consumer-driven health plan cost trends, costs on an industry-by-industry basis, and dental cost trends.
“In this period of enormous fluctuation in both healthcare and the broader economy, timely and appropriate benchmark comparisons are essential to identifying areas for program intervention, measuring progress, and providing decision makers with appropriate context for program performance,” said Chris Justice, the paper’s lead author and senior director of practice leadership, Truven Health Analytics. “Employers, insurers, and plan administrators who are able to take a data-driven approach to managing population health and productivity can make their benefit programs sustainable in the current market.”
Data for the report were compiled from the Truven Health MarketScan® Research Databases, which provide fully integrated, anonymous, individual-level healthcare claims data that reflect real-world treatment patterns and costs.
For more information on the paper, please visit
Truven Health Analytics provides information, analysis and services to the health care industry. More at www.truvenhealth.com.