Forces Behind Increased Healthcare Costs

The recent report by BenefitFocus, a healthcare technology firm highlights the major driving forces behind increased healthcare costs for the top 500 employers in the country. There are no surprises with the report, other than almost all of the Top 10 most expensive diagnosis are preventable. Large or small employers continue to grapple with higher deductibles despite a fragmented and often frustrating variance in the cost of procedures.

What we need in this country is price transparency- a colonoscopy in Roanoke can range in price from $900 to $4,530 depending upon the setting. An MRI can vary from $871 to $1,800. As employee shared responsibility payments increase with higher deductibles, the need for price transparency become of utmost importance.

The BenefitFocus report recognizes the following conditions as the most significant drivers in costs:

  1. Diabetes – the king of healthcare costs, with over 44% of all large employers stating this is the
    Number 1 issue.
  2.  Cancer- 35% of all employers have seen a rise in the number of cancer diagnosis and costs.
  3. Obesity- which can lead to other top ten conditions such as hypertension, high cholesterol,
    arthritis, and depression.
  4.  Arthritis – 3 out of 10 employers say that arthritis has a major impact on their costs.
  5.  Heart Disease – over 34% of all employers list heart disease as a major driver.
  6. Hypertension/High Blood Pressure – 30% of all employers rank hypertension in the top 5
  7. Depression/Mental Illness – Employers indicate that 14% of their total healthcare spend is
    related to mental illness claims.
  8. High Cholesterol- continues to be a top 10 cost, but the costs continue to come down due to
    awareness and statin drugs.
  9. Smoking – ironically ten years ago, this was a TOP 3 item. More and more folks are now aware
    of the dangers of smoking, but employers are cautious as they see an increase in younger
    employees smoking again.
  10. High Risk Pregnancies – while only 6% of employers indicate this is a trend, one claim can blow
    through stop loss insurance.

For more information regarding healthcare cost containment or benefits for your firm, firm, please give us a
call at (540) 563-1005.

Burman S. Clark

Burman S. Clark, RHU, CSA is the President of Muneris Benefits and a licensed insurance broker and consultant. His independent practice and focuses on employee benefits, individual life, disability, medical, and senior products. Burman has traveled extensively and provided guidance to large employer associations with regards to the Affordable Care Act.