Medical inflation rate for 1999-2000

[Guest Eanselm]

Does anyone know what the anticpated medical inflation rate is expected to be for this year? For PPO plan and dental plans and perscriptions?

[Greg Judd]

Hi,

Sounds like you may be confusing healthcare inflation with health claims trend projections--2 different kettles of fish. The latter can get especially fishy.

For healthcare inflation projections, see HCFA's site: www.hcfa.gov/stats/NHE-Proj/

I particularly like this one, because it breaks out private insurance spending projections: www.hcfa.gov/stats/NHE-Proj/proj1998/tables/table3a.htm

Simply put, trend is a function of inflation--cost change per unit--and use--number of units used. You'll find a wide range of opinions on this, and a critical point of variation depends on where most of your employees receive their care. You may get responses to this question, but weigh them carefully--what's trend for a firm with most of its employees in WI, for example, may not be what your firm should be ready for.

[Guest G Burns]

You should try towersperrin.com. Their annual surveys of healthcare costs with projections should suffice.

[Greg Judd]

G Burns is probably referring to an article of this sort from Towers Perrin

www.towers.com/towers/news/pr990106.html . There is no towersperrin.com URL; keying in that URL will, however, take you to Towers Perrin's home page, from which it can be difficult to find articles on specific subjects.

BTW, the author's 'employer [healthcare] cost increases' are not 'medical inflation' rates, but are more akin to trend forecasts, since an employer's costs reflect both use of healthcare and changes in the costs of healthcare goods & services.

Too few people in the business grasp the distinction between healthcare inflation and healthcare cost trend. If you assume a forecast of healthcare inflation is a safe proxy for trend, you'll likely end up budgeting too little for your future health benefits outlays--& most HR VPs, CFOs, CEOs, et al don't like surprises like that. So, it doesn't hurt to revisit the inflation/trend distinction now & again.

[This message has been edited by Greg Judd (edited 07-31-99).]

[Guest G Burns]

What ever do you mean ? If you can key in towersperrin.com and be taken to their home page, how can you say their is no URL ?? If you key in towersperrin.com then click on Hot Topics then scroll down to about the 11th item you will see what is left of 1998 Health Care Cost Survey. There used to be more but the site is time sensitive. They have been known to give copies of the survey at little or no cost.