Advances in medical technology identified as primary driver of increased
costs
INDIANAPOLIS, May 27 /PRNewswire/ -- The WellPoint Institute of Health
Care Knowledge today released a report detailing the primary drivers of
increased health care services and health insurance premiums, dispelling the
notion that insurer profits are fueling spiking costs. The May 2009 Institute
report, titled "What's Really Driving the Increase in Health Care Premiums?,"
compiles research from sources such as PricewaterhouseCoopers, the Robert Wood
Johnson Foundation, the Kaiser Family Foundation, the Bureau of Labor
Statistics and the Congressional Budget Office.
"As the health care reform debate heats up, the results of this report
provide important insights into the drivers of health care costs in this
country," said Sam Nussbaum, M.D., executive vice president and chief medical
officer of WellPoint, Inc. "The bottom line is that those items typically
blamed for rising health care costs -- insurer profits, the aging of America
and the high cost of medical malpractice -- in fact have little impact on
health care premiums."
According to the report the "key drivers" of spiraling U.S. health care
costs are:
- Advances in medical technology and subsequent increases in
utilization.
- Price inflation for medical services that exceeds inflation in other
sectors of the economy.
- Cost-shifting from people who are uninsured and those receiving
Medicare and Medicaid to the private sector.
- High cost of regulatory compliance.
- Patient lifestyles, such as physical inactivity and increases in
obesity.
Citing research from PricewaterhouseCoopers' December 2008 report, The
Factors Fueling Rising Health Care Costs, the report also debunks a commonly
held belief about the profitability of health insurance companies. Contrary to
public opinion, which puts health insurers' profitability at somewhere between
twenty-five and forty percent, PricewaterhouseCoopers confirms that in truth
is only three cents of every health care premium dollar is spent on health
insurer profit. This is less than the 2008 profit of 4.9 percent reported to
Reuters by auto and truck manufacturers, the 4.8 percent reported by health
care facilities, or the 4.7 percent reported by utility companies.
"We are all working toward the common goal of meaningful and responsible
health care reform," Nussbaum said. "For this to occur and be sustainable, we
should focus on the main drivers of health care costs. Independent of funding,
we need to institute reforms that improve health care quality and outcomes,
increase preventive care and reduce those common illnesses, including cardiac
disease and diabetes and chronic lung disease, that result from smoking,
lifestyle and obesity."
According to the Institute's report, newer medical technologies tend to
increase prices because they are generally more expensive than the older
technologies they replace. While the availability of more advanced, superior
technologies can yield better results for some patients, these technologies
and diagnostic tests can be used inappropriately in some situations where
existing, older technologies are more effective and accurate.
"We have learned over time that newer technologies do not always produce
better health outcomes," Nussbaum continued. "We need to focus on outcomes and
delivering better quality care and apply the breathtaking advances in
technology and treatment when they produce better patient care. The wise
application of these expensive new therapies will result in more affordable
health care for all Americans."
The WellPoint Institute of Health Care Knowledge was established with the
belief that intimately understanding the factors impacting consumers'
experiences with their health plan and which factors most impact their
satisfaction are central to efficiently addressing consumer needs. For more
information and a copy of the full report, please visit WellPoint Institute of
Health Care Knowledge at www.wellpoint.com/institute.
About WellPoint:
WellPoint works to simplify the connection between Health, Care and Value.
We help to improve the health of our communities, deliver better care to
members, and provide greater value to our customers and shareholders.
WellPoint is the nation's largest health benefits company, with approximately
35 million members in its affiliated health plans. As an independent licensee
of the Blue Cross and Blue Shield Association, WellPoint serves members as the
Blue Cross licensee for California; the Blue Cross and Blue Shield licensee
for Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri
(excluding 30 counties in the Kansas City area), Nevada, New Hampshire, New
York (as the Blue Cross Blue Shield licensee in 10 New York City metropolitan
and surrounding counties and as the Blue Cross or Blue Cross Blue Shield
licensee in selected upstate counties only), Ohio, Virginia (excluding the
Northern Virginia suburbs of Washington, D.C.), Wisconsin; and through
UniCare. Additional information about WellPoint is available at
www.wellpoint.com.
SOURCE: WellPoint, Inc.
CONTACT: Cheryl Uram Leamon of WellPoint, +1-317-488-6748
Web Site: http://www.wellpoint.com
