Cause and effect…and effect

American Medical News looks at the cost drivers underlying this year’s average of $20,728 in healthcare costs for a typical American family of four. Here is an excerpt:

Milliman breaks down the model family’s health care spending by category: physician services, inpatient stays, outpatient care and pharmacy costs. Spending on physician services grew at the lowest rate of any of the care components in the Milliman index, Mayne said, and that’s been true for several years.

“Some of the other categories are catching up,” she said. As a result, physician services now account for 32% of the medical index, at $6,647 — but inpatient hospital expenses were nearly as high a share, at $6,531.

So that’s what’s underlying the cost increases. What are the downstream implications for employers and the employees receiving insurance through their employer? CNN/Money delves into that question:

Over the past five years, 40% of working adults have seen their employer-sponsored benefits reduced or eliminated entirely, according to a survey by the National Endowment for Financial Education, or NEFE.

Harris Interactive conducted the survey on behalf of the nonprofit, polling 2,210 adults in the U.S. — more than half of whom were employed.

An overwhelming majority, or 72%, of those who saw their benefits cut said their health insurance coverage was hardest hit, NEFE said. As employers cut back, employees shouldered more costs, including higher deductibles and co-pays, as well as more expensive premiums.

This year, workers’ out-of-pocket costs rose 5.8% to an average of $3,470 for a typical family of four, according to data compiled by independent actuarial and health care consulting firm Milliman Inc.

The trend of employees taking on more of the cost share is not new and has persisted more often than not in recent years. Just roll back the calendar one year and consider what we posted last May 31.