This topic has been very interesting and popular to our readers; therefore, we thought it would be helpful to continue with more 2010 medical cost trends. In this blog we will look at health care fraud and abuse, lifestyle factors, some preventable risk factors, and lastly where the money is going.
Health Care Fraud and Abuse:
- Health care fraud is a growing problem that is estimated to cost $69 billion, according to the National Health Care Anti-Fraud Association. This means that $100 million per day, which makes health care more expensive.
- Health care fraud accounted for 5% of the $1.9 trillion spend on health care in 2004.
Lifestyle Factors: Multiple chronic health conditions:
- Chronic disease accounts for about 75% of the more than $2 trillion spent on health care yearly in the U.S.
- 80% of seniors have least one chronic condition.
- 50% of seniors have at least two chronic conditions
- In 1996, 7% of Americans had more than three chronic conditions and in 2005 the percentage rose to 13%.
What are some preventable risk factors?:
- Obesity – 10% of total claims costs are directly attributable to obesity.
- Tobacco use – 25% of Americans smoke and 10% of total claims are attributable to smoking.
- Sedentary lifestyle – 60% of Americans don’t exercise and only 3% follow basic wellness goals.
- Poor nutrition – 60% of Americans exceed their ideal body mass index (BMI).
Where does the money go?:
- In 2007, PricewaterhouseCoopers Health Research Institute completed a national report to determine factors driving health care costs. This report showed that an average 87 cents of every premium dollar spent on medical services and products, with hospitals and physicians receiving more than two-thirds of the premium.
- On average, for each premium dollar spent, 10 cents goes toward insurer’ administrative functions, which include: information technology investments, premium taxes, fraud detection, provider credentialing, pay-for-performance programs, enrollment and billing, and claims processing.
We hope you have found this information helpful and interesting. Being knowledgeable in the medical cost trends is very important for both employers and employees. Your benefit consultant can help you better understand these trends.
(Resource: Anthem Blue Cross)