Controlling Health Care Costs

Abstract

Although employers and employees alike enjoyed a brief reprieve from double-digit health care cost increases in the mid-to late-1990s, costs are once again rising significantly. Through cost shifting to employees, some employers will transfer 25% to 30% of the current increase in health benefit costs. However, the most popular and probably the most effective way to control costs has been through plan design. The most effective longterm methods of controlling health care costs are managing utilization, reducing unnecessary utilization and encouraging positive use of the health care delivery system. This article reviews trends, offers some insight into potential future costs and outlines strategies for employers to offer attractive benefits despite of cost constraints.