Rise in employer healthcare costs slowing: survey

WASHINGTON (Reuters) - Medical costs for U.S. employers will rise by 9 percent in 2011, slightly less than they have risen this year, according to a survey released on Monday.

EKG technician Diana Goodie (R) performs an electrocardiogram on a patient in the hallway of the emergency room at Ben Taub General Hospital in Houston, Texas, July 27, 2009. REUTERS/Jessica Rinaldi

To try to control the impact, employers are turning to wellness programs but also making workers shoulder more of the costs of healthcare, the survey from consultants PricewaterhouseCoopers LLP found.

"Employers are raising the stakes in their wellness and disease management programs. The use of incentives has continued to increase and broaden over the past two years," reads the report, availablehere.

The PriceWaterhouseCoopers team questioned 700 companies in 30 industries for the report.

About 60 percent of Americans under the age of 65 get health insurance through an employer. Health benefits are often a major part of any employee compensation package.

Most employers, 63 percent, offer a preferred provider organization or PPO, the survey found. And many have raised the deductible, with 43 percent having a deductible of $400 or more, compared to 25 percent in 2009.

Two-thirds of companies said they planned to expand wellness programs and 63 percent already offer health risk questionnaires, according to the report.

But fewer than half -- 39 percent -- offered weight management programs and just 27 percent provided nutritional training. More than two-thirds of Americans are overweight or obese, a cause of many of the most expensive health conditions such as heart disease, diabetes and cancer.

Employers blame shifting of Medicare costs for much of the anticipated increase in their healthcare costs, the report found.

“In 2011, Medicare, which is the single largest payer for hospitals, will reduce payment rates to hospitals for the first time after seven years of increases that nearly matched or exceeded inflation increases,” PricewaterhouseCoopers said in a statement.

“Health reform delivers only a minor impact on the underlying medical cost trends in 2011 and introduces hundreds of changes in the healthcare system designed to reduce costs and improve efficiencies in the long-term,” said Kelly Barnes, U.S. health industries leader at PricewaterhouseCoopers.

“These changes could bring significant new cost savings opportunities for employers and payers as well as new choices and transparency for workers buying insurance,” Barnes added in a statement.

Editing by Julie Steenhuysen and Mohammad Zargham