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Study projects 8% increase in health care costs


Average annual health care cost increases for most large U.S. employers are expected to hold at 8% though 2008, according to a forthcoming survey by Watson Wyatt Worldwide and the National Business Group on Health.

The 8% increase projected for both 2007 and 2008 mirrors that of 2006, but is a decline from 8.5% in 2005, 10.6% in 2004 and 13% in 2003.

Rather than breathing a sigh of relief because the rate of increase appears to be stabilizing, most large employers are creatively addressing their employees' growing health care needs, the survey found.

For example, 78% of the surveyed companies are offering their employees access to nurse help lines, 72% offer health risk appraisals and 42% are implementing programs to reduce employee obesity.

In addition, some employers are investing in onsite clinics (23%) and pharmacies (14%), hoping that easy access to health care services will improve employee health and, ultimately, lower costs.

"With no reduction in cost increases, it becomes even more important to engage employees to carefully consider health care choices and make the most of health care dollars," said Ted Nussbaum, Watson Wyatt's Stamford, Conn.-based director of group and health care consulting in North America. "While investing in education programs, communication and infrastructure will not change behavior overnight, it will produce returns in the long run," he said.

The 12th annual Watson Wyatt/NBGH health survey is based on responses of 573 large employers that collectively employ 11 million full-time workers.

Copies of the report will be released at the "NBGH Business Health Agenda 2007" March 14-16 in Washington. For more information about the meeting, visit