Managed Care - October 2008 - (Page 51) MANAGED CARE OUTLOOK Looking back to understand future trends mployer-sponsored health care has evolved a lot over the past 20 or so years. Towers Perrin, in its annual Health Care Cost Survey, reviewed key trends in health care costs, enrollment, plan design, population health, prescription drugs, E retiree medical benefits, and other areas from 20 years ago as a way to better understand future trends. To no one’s surprise, the health care landscape has changed significantly. Here’s a summary of the findings: THE FUTURE U.S. medical costs will continue to outpace inflation 20 YEARS AGO Average annual cost increase: 15% Americans spent $558 billion on health care Nation’s health bill was paid by: Government — 41% Private insurers — 38% Individuals — 21% 65% of private sector employees had employer-based retiree medical coverage TODAY Average annual cost increase: 6% Americans are projected to spend Americans are projected to spend $2.6 trillion on health care in 2009 $4.3 trillion on health care in 2017 2009 projections: Government — 46% Private insurers — 42% Individuals — 12% 47% of large employers subsidize retiree medical costs 2017 projections: Government — 49% Private insurers — 41% Individuals — 11% Within the next 10 years, it is anticipated that 90% of private sector retirees will pay the majority of the cost of their health care coverage In five years, we anticipate ABHPs will be offered by 80% of employers and will be the primary medical option for 50% of that group Plan type market share: Indemnity — 62% PPO — 13% HMO — 20% POS — 5% ABHP—N/A $40.3 billion spent on prescription drugs Plan type market share: Indemnity — 2% HMO — 26% POS — 15% ABHP — 10% More than $188.5 billion spent on prescription drugs U.S. prescription drug spending is projected to increase to $446.2 billion in 2015, a 138% increase in 11 years Employers will continue to band together to form prescription drug purchasing pools to increase their purchasing power through higher volume and shared expertise Average price of a prescription: $22.00 Average price of a prescription: $75.00 Source: Towers Perrin, “2009 Health Care Cost Survey” ABHP = Account-Based Health Plans OCTOBER 2008 / MANAGED CARE 51
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