Survey: So far, efforts to control health costs have weak impact

September 26. 2012 1:38PM

By Beth Fitzgerald

New Jersey health care experts are hoping changes now under way will eventually counterbalance data reported in a new survey that found the cost of medical claims paid by employer-sponsored health plans continues to rise.

Overall claims costs are forecast to increase in the high single-digits next year, according to 70 insurance companies who took part in the Wells Fargo Insurance Employee Benefits Survey.

"Despite ongoing efforts to control health care expenses, the survey found that insurers are not expecting a drop in claims costs for 2013," said Dan Gowen, senior vice president of Wells Fargo Insurance's national employee benefits practice. Wells Fargo Insurance is an insurance broker handling $20 billion in premiums annually across a wide range of insurance lines, including health insurance. Gowen said employer premiums will likely rise next year as claims increase, as will employees' share of health care costs. He said employers should consider "ways to maintain and improve the health risk of employees and maximize their benefit investment."

John Sarno, president of the Employers Association of New Jersey, said the recession and the sluggish recovery mitigated health care costs because people put off checkups and basic medical care to save money.

"But in the last year, we've seen much higher consumption, because people are feeling a little better about the job market and are no longer delaying their basic treatment," he said. And he said a provision of the Affordable Care Act allowing dependent adults to remain on their parents' health plan until age 26 also has increased medical costs.

Sarno said he hopes health reform initiatives, like accountable care organizations and patient-centered care, eventually will hold down health care costs by "giving providers incentives to have better outcomes, rather than just bill for the individual's treatment. That has great promise in lowering costs."

Christine Stearns, vice president for health and legal affairs for the New Jersey Business & Industry Association, said the cost of health insurance is the biggest challenging facing NJBIA members, whose health care costs have doubled in the past decade.

"There are certainly innovations in health care delivery that will begin to bend the cost curve in the future, but whether they are progressing fast enough to have a real impact in the short term remains to be seen," she said. "You don't want the cheapest health care, you want the best value in health care. The clock is ticking as to whether or not these changes can take place fast enough, before some of the smaller employers are priced out of the market."


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