Rising Healthcare Costs Hit Orlando
Source: Orlando Sentinel – September 24, 2008
By: Anika Myers Palm
Click here to download PDF
Orlando-area employers experienced some of the biggest increases in health-care costs in the nation this year, according to an annual study released Tuesday by Hewitt Associates.
The average company in Metro Orlando paid 9.2 percent more for its employees’ health coverage this year compared with 2007 -- more than all but two of the metropolitan areas surveyed by Hewitt, a human-resource consulting company based in Illinois.
Nationwide, companies paid 6 percent more on average for their workers’ health care.
Hewitt said it expects costs next year to rise an average of 6.4 percent in the U.S., as the average cost of covering a single employee rises from $8,331 this year to $8,863 in 2009.
A couple of health-care experts said that means health care is also likely to become more expensive again next year for workers as well, both locally and across the country, as employers transfer more of the costs to their work forces and move more aggressively to reduce or manage chronic health conditions.
“I think that the Hewitt study should be a loud siren to everyone,” said Becky Cherney, president and chief executive officer of the Orlando-based Florida Health Care Coalition. “It’s not unlike what’s happening in the financial sector right now.”
The Hewitt study noted that companies’ annual health-care expenses per employee have risen from $4,914 in 2002. Health coverage cost Orlando companies an average of $7,573 for each employee this year, according to Hewitt, compared with $9,477 for the average employer in Boston, which had the highest dollar total in the nation. Only Cincinnati (11.1 percent) and Columbus, Ohio (9.9 percent), reported higher average rate increases than Orlando’s.
Cherney said Florida employers must absorb added costs related to the state’s above-average percentage of uninsured residents and from unfunded state mandates offering low-cost health insurance to unemployed persons. Some companies are hoping to reduce their expenses by boosting preventive programs while waiting on legislative help.
“The members of my coalition are working on things where they know the costs are,” Cherney said, citing efforts to reduce diabetes, heart disease and asthma.
“If you really want to find a way to reduce the cost of what you’re paying, it’s better if your employees are more healthy,” said Ron Wince, CEO of the efficiency-consulting firm Guidon Performance Solutions and a member of the Center for Healthcare Transformation, a group working to improve the U.S. health-care system.
At some point, Wince said, workers will probably be encouraged by their employers to shop for their medical care and “look for the best value for their dollar.”
“That consumerism is probably lagging a little, but I would say it’s not too far behind where we are now,” he said.
Nationally, workers’ share of their health-care costs -- including both payroll insurance contributions and out-of-pocket expenses -- are expected to jump 8.9 percent next year, to $3,836 per employee.
2008 health-care cost increases, major U.S. metro areas
City Increase
Orlando 9.2%
Minneapolis 9.1%
New York 8.7%
Philadelphia 8.1%
Dallas/Ft. Worth 8.1%
Los Angeles 7.5%
Detroit 7.5%
U.S. avg. 6.0%
SOURCE: Hewitt Associates LLC
Annual increase in health-care costs for U.S. companies
Year Increase
2002 15.2%
2003 14.7%
2004 12.3%
2005 9.2%
2006 7.9%
2007 5.6%
2008 6.0%
2009* 6.4%
*Projection.
SOURCE: Hewitt Associates LLC
Anika Myers Palm can be reached at apalm@orlandosentinel.com or 407-420-5022.
All contents © 2009 Orlando Sentinel. All Rights Reserved.
Related Links
Guidon Business Process Management Services
Healthcare Industry Solutions
Contact Guidon
Contact us or call us at 1.866.986.4414 or 480.986.4414 (for international callers) for more information regarding how a Guidon solution can help your organization.
RSS
Facebook
LinkedIn
Twitter