Healthcare costs for U.S. companies seen rising 9 percent: survey

By I-Ching Ng

NEW YORK (Reuters) - Healthcare costs for U.S. businesses are seen rising by 9 percent in 2010, according to a PricewaterhouseCoopers survey, which showed that employers will expect workers to pay more of the bill.

PwC's annual "Behind the Numbers: Medical Costs Trends for 2010," released on Thursday, showed that one of the factors driving costs was more workers using health insurance plans if they expected to be laid off.

And, it showed that as unemployment rises in the United States, leaving more people uninsured or underinsured, there will be a decline in membership in commercial plans and greater dependence on public programs, such as Medicaid.

Mike Thompson at PwC's global human resource solutions group said that as more Americans turned to public healthcare programs, healthcare providers would look to private patients to make up lost revenue.

According to PricewaterhouseCoopers, costs for healthcare products and services have risen by 9.2 percent in 2009 after rising 9.9 percent in 2008.

More than 500 employers and numerous provider-based health plans were surveyed for common themes and trends expected to influence costs, PricewaterhouseCoopers said.

The survey showed that:

- 42 percent of employers would increase workers' share of healthcare costs

- 41 percent of employers would increase medical cost sharing through changes to plans

- More than two-thirds of employers offer wellness and disease management programs, but few said they were very effective at lowering costs.

"The recession is creating a tug of war between upward and downward pressures on medical costs," said Jack Rodgers, managing director in the health policy economics group of PricewaterhouseCoopers.

"With most prices holding steady or falling, health plans will put pressure on providers to hold the line on medical costs."

PricewaterhouseCoopers said that in addition to the prospects of healthcare reform, some trends deflating spending on healthcare were increased use of generic drugs and wellness and disease management programs. It noted that patent protection on five blockbuster drugs is due to expire in 2010, with more in the next two years.

It said that 40 percent of employees of businesses surveyed were enrolled in wellness programs such as for diabetes, asthma and cancer prevention, and 15 percent were in disease management programs for things like quitting smoking or losing weight.

The survey showed that a growing number of Americans were in high deductible health plans, which are expected to lower use of health services, partly because people cannot afford medical procedures.