Tracking health care costs: an update

• Published in: Health affairs (Millwood, Va.) Va.), 1997-07, Vol.16 (4), p.151-155
• Main Authors: Ginsburg, P B, Pickreign, J D
• Format: Article
• Language: English
• Subjects: Companies; Competition; Consumers; Cost Control - trends; Data Collection; Employee benefits; Employees; Employers; Employment; Expenditures; Forecasting; GDP; Gross Domestic Product; Group health insurance; Health care; Health Care Costs - statistics & numerical data; Health Care Costs - trends; Health care expenditures; Health care industry; Health care policy; Health Expenditures - statistics & numerical data; Health Expenditures - trends; Health insurance; Health maintenance organizations; Health services; HMOs; Humans; Inflation; Insurance; Insurance premiums; Insurance, Health - economics; Markets; Medicare; Payroll costs; Per capita; PPOs; Price indexes; Statistical analysis; Studies; Trends; Underwriting; United States
• ISSN: 0278-2715; 1544-5208
• DOI: 10.1377/hlthaff.16.4.151

Although private insurance premiums may head up in the future, it is important to distinguish this from increases in the underlying rate of growth of health care costs. Cost trends for 1996 suggest a very low rate of increase. The upturn envisioned for 1997 is modest, and in no way portends a return to the rate of the 1980s. The key forces that led to the decline in cost growth - purchasers' shift from bill-paying to purchasing health plans and willingness to change plans for lower premiums - are still in place. Those looking only at changes in premiums could be misled about the behavior of underlying health services costs. An important factor to keep in mind is that health care cost trends reported by providers tend to lead private health insurance premiums by about 18 months.