Health care reform extends affordable insurance to millions, and that's important. But the rising medical costs that drove insurance premiums before the passage of reform legislation are still our biggest challenge.
In fact, if we don't find a way to hold down medical costs, our health care system and the entire economy is in danger. The Congressional Budget Office estimates that if current cost trends hold, by 2025 health care spending will account for more than 25% of our gross domestic product.1
Medical services are getting more expensive, and people are receiving more care. So insurance companies are paying more in medical benefits than ever before.
And Americans are spending more on health care today than ever before:
Between 2006 and 2007, national medical cost increases were driven primarily by higher prices for medical services, other factors that contribute to overall cost increases include:
Between 2000 to 2009:3
From 2000 to 2009, the frequency of other common medical services increased.6
BCBSNC has set a goal to reduce our administrative costs by 20 percent by 2014. However, it's important to recognize that 87 cents of every premium dollar our customers pay goes straight to medical costs.
We're also enhancing our programs to hold down costs and improve the quality of health care for our customers:
1 "The Long-Term Outlook for Health Care Spending," Congressional Budget Office, November 2007. http://www.cbo.gov/ftpdocs/87xx/doc8758/11-13-LT-Health.pdf
2 BCBSNC claims data, 2007-2009, insured group customers, average allowed charge.
3 "The Factors Fueling Rising Health Care Costs 2008," Prepared for America's Health Insurance Plans, December 2008. http://www.americanhealthsolution.org/assets/Reform-Resources/Cost-Trends-and-Cost-Shifting/risinghealthcarecostsfactors2008.pdf
4 BCBSNC claims data, 2007-2009, insured group customers, average allowed charge.
5 Costs are for Office visits for established patients for evaluation and management. Excludes lab costs.
6 BCBSNC claims data, 2007-2009, insured group customers.
7 Includes both Bariatric and Lap Band Surgery.
8 BCBSNC data, Bridges to Excellence pilot study.
9 Medical Expenditure Panel Survey (MEPS), conducted by the Agency for Health Care Research and Quality, U.S. Department of Health and Human Services. Cited in "Health Care Costs: A Primer," The Kaiser Family Foundation, March 2009. http://www.kff.org/insurance/7670.cfm
10 Finkelstein, E., Trogdon, J., Cohen, J. W., & Dietz, W. (2009). Annual medical spending attributable to obesity: Payer-and service-specific estimates. Health Affairs, 28(5), w822-w831.http://content.healthaffairs.org/cgi/content/short/hlthaff.28.5.w822
11 "The Future Costs of Obesity: National and State Estimates of the Impact of Obesity on Direct Health Care Expenses," United Health Foundation, the American Public Health Association and Partnership for Prevention. Updated November 2009. http://www.americashealthrankings.org/2009/report/Cost%20Obesity%20Report-final.pdf
12 US Bureau of the Census, Fact Sheet: North Carolina, 2006. Cited in North Carolina Prevention Report Card 2008: A Progress Report on Prevention & Health in North Carolina, 2005-2007. NC Prevention Partners. http://www.ncpreventionpartners.org/dnn/LinkClick.aspx?fileticket=Kt38jQLmv6c%3D&tabid=162