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Report Summary
The Factors Fueling Rising Health Care Costs 2008
Some findings of the report:
Increases in health care delivery costs were a significant factor in overall increases.
- Physician spending and hospital inpatient spending increased by more than 7.5 percent.
- Outpatient spending, such as dianostic testing, grew at a rate of 13.6 percent.
- Prescription drug spending increased 8.6 percent.
Premiums increased 8.8 percent between 2004 and 2005.
- Higher utilization accounted for 43 percent of the increase, fueled by factors such as consumer demand, new medical treatments and defensive medicine, aging population, and unhealthy lifestyles.
- Price increases accounted for 30 percent of the increase, impacted by provider consolidation; increased costs of labor; and new, higher priced technologies.
Out of every premium dollar, 86 cents go directly to paying for medical services.
- Of the remaining premium dollar, five cents go to consumer services, including care and disease mangement, prevention, information technologies, provider support, and marketing.
- Six cents go toward government fees, regulation, claims processing, and administration.
- Health insurance plan profits comprise three cents of the premium dollar.
The study found promise in emerging programs. Health plan trends promoting provider pay-for-performance, consumer engagement, and healthy lifestyles were regarded as having potential to mitigate future cost increases.
 View the full report.
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