Price Inflation Again to Blame for Much of Projected Rising Health Plan Costs

Options are available, though, to mitigate the jump and provide more affordable care.

The Segal Group’s new Health Plan Cost Trend Survey reveals that, as found by its last year’s survey, price inflation will be the main driver of projected health plan cost increases in 2018.

This will be seen most notably in prescription drugs, with projected 8.8% price inflation, and hospital services, with projected 4.6% price inflation. Compare those jumps with the projected growth in use of prescription drugs and hospital services—only 2.1% and 1.5%, respectively, Segal found.

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Yet, there are options available to mitigate the price inflation, according to Eileen Flick, senior vice president and director of health technical services at Segal in New York City. She says, “Plan sponsors should consider using alternative value-based payment approaches such as accountable care organizations and bundled payments for episodes of care. Under these payment alternatives, providers are reimbursed at a set rate for all services involved in an episode, and they are accountable for the quality of care and outcomes. We have also seen a continued push toward specialized pharmacy management and intensified pharmacy management programs.”

According to the survey, some of the price inflation results from inappropriate use of emergency rooms and urgent-care facilities, as well as from unnecessary, expensive diagnostic radiology procedures, when a simple X-ray would suffice. “Plan sponsors should ensure their plan designs properly align with the costs of care and that participants are making smart choices in order to get the right care at the right place with the right provider,” Flick says. 

Bilingual Education Push from Lawton Retirement

The firm has appointed a director of bilingual employee education, tasked with delivering more culturally diverse education strategies and collateral to plan participants.

Lawton Retirement Plan Consultants LLC has formed an association with bilingual education expert Rebeca Heaton Juarez to provide bilingual financial wellness and 401(k) plan participant educational services.

Heaton Juarez is lauded by Lawton for her six years of service in the U.S. Air Force. The firm also highlights her “seven years of experience teaching, leading and educating” in the Milwaukee Public Schools, at the Milwaukee College Prep School and as part of the City Year and AmeriCorps service programs.

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More information on Heaton Juarez’s background is available on the Lawton Retirement Plan Consultants website. In her new role, she will formally become director of bilingual employee education at Lawton Retirement Plan Consultants.

It should quickly be noted that other retirement plan services firms have recently announced their own efforts to expand the cultural awareness and diversity of their products, services and work force. The same is true when it comes to efforts to boost the number of women working in the financial services field.

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