WellPoint Institute of Health Care Knowledge Releases Report on Health Care Costs

Wed May 27, 2009 9:01am EDT

* Reuters is not responsible for the content in this press release.

WellPoint Institute of Health Care Knowledge Releases Report on Health Care

Advances in medical technology identified as primary driver of increased costs

INDIANAPOLIS, May 27 /PRNewswire/ -- The WellPoint Institute of Health Care
Knowledge today released a report detailing the primary drivers of increased
health care services and health insurance premiums, dispelling the notion that
insurer profits are fueling spiking costs. The May 2009 Institute report,
titled "What's Really Driving the Increase in Health Care Premiums?," compiles
research from sources such as PricewaterhouseCoopers, the Robert Wood Johnson
Foundation, the Kaiser Family Foundation, the Bureau of Labor Statistics and
the Congressional Budget Office.

"As the health care reform debate heats up, the results of this report provide
important insights into the drivers of health care costs in this country,"
said Sam Nussbaum, M.D., executive vice president and chief medical officer of
WellPoint, Inc. "The bottom line is that those items typically blamed for
rising health care costs -- insurer profits, the aging of America and the high
cost of medical malpractice -- in fact have little impact on health care

According to the report the "key drivers" of spiraling U.S. health care costs

    --  Advances in medical technology and subsequent increases in
    --  Price inflation for medical services that exceeds inflation in other
        sectors of the economy.
    --  Cost-shifting from people who are uninsured and those receiving
        and Medicaid to the private sector.
    --  High cost of regulatory compliance.
    --  Patient lifestyles, such as physical inactivity and increases in

Citing research from PricewaterhouseCoopers' December 2008 report, The Factors
Fueling Rising Health Care Costs, the report also debunks a commonly held
belief about the profitability of health insurance companies. Contrary to
public opinion, which puts health insurers' profitability at somewhere between
twenty-five and forty percent, PricewaterhouseCoopers confirms that in truth
is only three cents of every health care premium dollar is spent on health
insurer profit.  This is less than the 2008 profit of 4.9 percent reported to
Reuters by auto and truck manufacturers, the 4.8 percent reported by health
care facilities, or the 4.7 percent reported by utility companies.

"We are all working toward the common goal of meaningful and responsible
health care reform," Nussbaum said. "For this to occur and be sustainable, we
should focus on the main drivers of health care costs. Independent of funding,
we need to institute reforms that improve health care quality and outcomes,
increase preventive care and reduce those common illnesses, including cardiac
disease and diabetes and chronic lung disease, that result from smoking,
lifestyle and obesity."

According to the Institute's report, newer medical technologies tend to
increase prices because they are generally more expensive than the older
technologies they replace. While the availability of more advanced, superior
technologies can yield better results for some patients, these technologies
and diagnostic tests can be used inappropriately in some situations where
existing, older technologies are more effective and accurate.

"We have learned over time that newer technologies do not always produce
better health outcomes," Nussbaum continued. "We need to focus on outcomes and
delivering better quality care and apply the breathtaking advances in
technology and treatment when they produce better patient care. The wise
application of these expensive new therapies will result in more affordable
health care for all Americans."

The WellPoint Institute of Health Care Knowledge was established with the
belief that intimately understanding the factors impacting consumers'
experiences with their health plan and which factors most impact their
satisfaction are central to efficiently addressing consumer needs.  For more
information and a copy of the full report, please visit WellPoint Institute of
Health Care Knowledge at www.wellpoint.com/institute.

About WellPoint:
WellPoint works to simplify the connection between Health, Care and Value. We
help to improve the health of our communities, deliver better care to members,
and provide greater value to our customers and shareholders. WellPoint is the
nation's largest health benefits company, with approximately 35 million
members in its affiliated health plans. As an independent licensee of the Blue
Cross and Blue Shield Association, WellPoint serves members as the Blue Cross
licensee for California; the Blue Cross and Blue Shield licensee for Colorado,
Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri (excluding 30
counties in the Kansas City area), Nevada, New Hampshire, New York (as the
Blue Cross Blue Shield licensee in 10 New York City metropolitan and
surrounding counties and as the Blue Cross or Blue Cross Blue Shield licensee
in selected upstate counties only), Ohio, Virginia (excluding the Northern
Virginia suburbs of Washington, D.C.), Wisconsin; and through UniCare.
Additional information about WellPoint is available at www.wellpoint.com.

SOURCE  WellPoint, Inc.

Cheryl Uram Leamon of WellPoint, +1-317-488-6748
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.