Health care costs, and consequently employee health benefits costs, have been increasing at an alarming rate for nearly a decade. Avoiding rising health care costs is nearly impossible, but you can learn about why they continue to rise and what you can do to manage costs for your organization and your employees.
To assist you, this article explains factors leading to continued rate hikes, the latest health care cost figures and strategies that businesses around the United States are implementing to help manage costs.
Factors Leading to Increased Health Care Costs
Why are U.S. health care costs skyrocketing? Several market conditions have led to a decade of unrelenting increases. Factors that have contributed to climbing health care costs over the past decade include:
- Expansion of health care providers
- Consolidation of managed care companies
- Political environment and government regulation
- Increased utilization and consumer demand
- New medical technology
- Weakening of managed care system
- Health care spending and medical cost inflation
- Increased prescription drug costs
An Aging Population
Because older workers are more prone to health problems, companies are seeing a rise in chronic conditions, costly medical problems and the use of prescription drugs, as well as an increase in the amount and frequency of catastrophic claims.