Double Digit Health Costs to Persist

A recent nationwide survey of Insurers and Blue Cross agencies released by a major international consultant, concluded that health care costs increases for 2008 versus 2007 will range between 13% to 14%. Dental care (based on increased utilization and provincially set fee guides) should rise between 7% – 11% this year.

These trends remain high in spite of the fact that prescription drug costs, as well as average benefit costs, have dipped slightly from 2007 levels. Accordingly, drug costs should still rise by an annual figure of 14.09% (as compared to 14.26% in 2007). Unfortunately, prescription drug costs represent the largest portion of health care costs, and thus significantly impacts the overall trend.

double digit health costs to presist

Health care costs are outpacing inflation. At this trend rate, health costs will double in the next 5 years…

Overall health care costs will continue to outpace other business costs and will significantly outpace increases in the Consumer Price Index. These double digit cost increases will likely persist for the next 5 to 10 years, due to increased demand for medical therapies brought about by our aging population.

Canadian employers will have to budget for employee benefit costs that in the absence of any government intervention, will double in the next 4 to 5 years. This is especially true given our weakening Canadian economy and potentially higher government expenditures; making it unlikely that Government will wade into these murky waters any time soon.

Employers will need to fend for themselves and will thus need to take an aggressive stand on longer term wellness initiatives that show the promise of reducing the trend of rising healthcare costs.

 

 

2018-04-17T15:56:12+00:00