Advances in Medical Technology Identified as a Primary Driver of Increased Costs

Institute releases report on health care costs

RICHMOND, Va., June 10 /PRNewswire/ -- A recent report issued by the WellPoint
Institute of Health Care Knowledge revealed some startling facts about health
care costs in America. The report identified the primary drivers of increased
health care services and health insurance premiums, dispelling the notion that
insurer profits are the primary drivers 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.

"The current rate of increase of health care costs is unsustainable," said C.
Burke King, president, Anthem Blue Cross and Blue Shield in Virginia. "We have
to address the key drivers of health care costs to be able to lower premiums
and increase access to health care for all members of the communities we
serve."

According to the report the "key drivers" of spiraling U.S. health care costs
are:
-- Advances in medical technology and subsequent increases in
utilization.
-- Price inflation for medical services that exceeds inflation in other
sectors of the economy.
-- Cost-shifting from people who are uninsured and those receiving
Medicare
and Medicaid to the private sector.
-- High cost of regulatory compliance.
-- Patient lifestyles, such as physical inactivity and increases in
obesity.

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
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.

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," King 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."

About the Institute of Health Care Knowledge:
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 Anthem Blue Cross and Blue Shield in Virginia
Anthem Blue Cross and Blue Shield is the trade name of Anthem Health Plans of
Virginia, Inc. (serving Virginia excluding the city of Fairfax, the town of
Vienna and the area east of State Route 123.). Anthem Blue Cross and Blue
Shield and its affiliated HMOs, HealthKeepers, Inc., Peninsula Health Care,
Inc. and Priority Health Care, Inc. are independent licensees of the Blue
Cross and Blue Shield Association. (R)ANTHEM is a registered trademark of
Anthem Insurance Companies, Inc. The Blue Cross and Blue Shield names and
symbols are registered marks of the Blue Cross and Blue Shield Association.
Additional information about Anthem Blue Cross and Blue Shield in Virginia is
available at www.anthem.com.

SOURCE Anthem Blue Cross and Blue Shield in Virgina

Scott Golden, Anthem Blue Cross and Blue Shield in Virginia, +1-804-354-5252