2009 June 18 Thursday
Medical Costs In United States Continue Rapid Ascent

The continued big increases in US health care costs are not sustainable.

Even after the US economy recorded its worst contraction in a quarter-century in late 2008 and early 2009, medical costs continued to grow. The perplexing contrast of health spending growing amid a deflated general economy will present employers with unique challenges for their 2010 healthcare benefits strategies.

Key findings from the report include:

  • Growth in medical costs for 2010 is expected to be 9 percent, slightly lower than in previous years
  • The recession and the prospect of health reform will help temper medical costs, impacting the pricing
  • As the recession pounded corporate profits in early 2009, employers surveyed said they were ready to push more of the costs of health insurance to their workers in 2010 while expecting more responsibility from workers for managing their personal health
  • Although health reform will have a major impact on the industry, its effect on medical costs likely will not be felt until 2011 or later

These rapidly rising costs are providing the political impetus to do something about health care policy. Unfortunately, I do not have faith in our political class to do something constructive about those costs.

Share |      By Randall Parker at 2009 June 18 10:43 PM  Economics Health


Comments
Wolf-Dog said at June 20, 2009 2:55 AM:

With the exception of high-end new treatments, given the deflationary pressures on medical equipment (and also the fact that many drug patents are expiring to let cheap generics take their place), the Medical Costa should have been lower, not higher.

How can this be explained? Is the medical establishment colluding to charge higher fees? This was certainly happening in the education bubble that made tuition absurdly high.


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