Employers foresee health costs up 8 pct: poll

U.S. businesses, which have seen skyrocketing inflation in their health care costs in recent years, expect those costs to rise 8 percent this year and next, according to a national poll released on Wednesday.

That is a respite after a 13 percent spike in 2003, but still not good news for employers, said the authors of the survey of about 600 large employers by the National Business Group on Health and benefits firm Watson Wyatt.

"We get to a comfort level at 8 percent because we've been at double-digit increases, but 8 percent would be a frightening number for other corporate expenses like payroll," said Ted Nussbaum, director of group and health care consulting at Watson Wyatt. "Eight percent is not a good number."

The report also found that about 20 percent of companies intend to substantially increase workers' share of health care costs.

The companies surveyed, which employ about 11 million full-time workers, are expanding programs to offer lower-cost health care, such as at on-site health clinics and through nurse hotlines, the poll found.

The programs are seen as a way to cut costs by treating illnesses before they become more serious and expensive to cure.

The study found 23 percent of companies polled run a medical clinic at the workplace, and 6 percent more plan to do so in 2008.

"It is a way to deliver primary health services at a lower cost and a way to keep people on the job longer," Nussbaum said.

Helen Darling, president of the National Business Group on Health, said that despite the stability, the cost increases are unsustainable and will lead to greater corporate support for an increasing role for government in providing health care.

And even though workers' share of medical costs relative to employers is relatively stable, the base keeps rising which will dampen consumers' use of health care, according to Darling.

"Money does change behavior, but the concern is, what will they use less of?," she said, adding that if they put off regular doctors' visits and use the emergency room more, that will raise costs further. "Then we'll have a vicious cycle."

The full report will be released in mid-March at a meeting of the National Business Group on Health, an employer lobbying group that includes many Fortune 500 companies, including Wal-Mart Stores Inc. and General Motors Corp..

The survey comes as national health care spending is seen doubling in 10 years to $4.1 trillion, according to a separate report by the National Health Statistics Group released on Wednesday.

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