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Blog: The Business of Management
 

August 25th, 2009

More Fuel for the Health Care Debate: Costs Up This Year by 10.5 Percent

Not that we needed it, but here’s some more fuel for the health care debate: An Aon survey of 60 health insurers “found that, on average, insurers expect to pay out 10.5 percent more in claims costs in the next year—slightly less than the 10.6 percent increase forecast last year,” according to a story in the Indianapolis Star.

I doubt that anyone at this stage is surprised by double-digit increases in health care costs, so you also shouldn’t be surprised by this: “The Indianapolis Star last week reported that according to a new report from PricewaterhouseCoopers’ Health Research Institute, 42 percent of employers surveyed said they would increase the share of the premium their workers pay in 2010. That’s up from 38 percent last year.”

One silver lining (if you could call it that) in the Aon report is the notion that “some employers also might swallow the higher costs because workers this year already have had to contend with salary freezes, reductions and layoffs,” according to Tom Lerche, Aon Consulting’s health care practice leader. “There’s one school of thought that says, ‘Our employees have borne enough, let’s minimize or not pass any costs along to the employee,’ he said.”

This unrelenting increase in health care costs is what is driving the Obama administration’s puush for health care reform, but as you probably know, that effort seems to have run into a brick wall. Remember the health care bill that Congress was going to get before the August recess that one benefits industry publication kept predicting in spite of all evidence to the contrary? Well, given the partisan bickering that never seems to end, don’t expect any health care legislation coming up for a vote anytime soon.

The funny thing is, the time seems right to have this debate, especially since working Americans seems to appreciate their health care and other benefits now, during the Big, Bad Recession, more than ever before. We’re also seeing a lot more innovation—like house calls for vulnerable patients to limit costly hospital admissions—that speak to the overwhelming desire to find a way to provide decent care without breaking the bank.

But as someone who remembers the Clintons’ ill-fated attempt to change America’s health care system back in 1993, this summer’s contentious debate sounds vaguely familiar. Yes, double-digit increases in health care costs should get our attention. As a nation, we desperately need to get a handle on unsustainable increases in health care as our population ages and needs more of it, but this feels like a replay of another battle from another time when another administration in Washington bungled the issue and any chance for meaningful change.

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