Business owners and consumers spent more on employee benefits in 2012, but at a reduced rate when compared to previous years, according to new data from the Centers for Medicare & Medicaid Services.
CMS reported that overall national health expenditures rose at an annual rate of 3.7 percent in 2012. That's the fourth straight year in which health care cost increases have been low.
Marilyn Tavenner, administrator for CMS, indicated that health care costs are rising, but at a pace that's slower than the U.S. economy.
"This is good news," said Tavenner. "We will continue to work with tools given to us by the Affordable Care Act that will both help us control costs for taxpayers and consumers while increasing the quality of care."
What accounts for the deceleration in health care costs increases, according to CMS, were fewer expenditures on prescription drugs, nursing home care, private health insurance and Medicare. For example, private health insurance spending rose 3.2 percent in 2012, down from 3.4 percent in the previous year. Spending also eased for prescription drugs after increasing by 0.4 percent, largely resulting from many name brand drugs losing their patent protection. Generic drugs, which tend to be cheaper, were purchased more abundantly as a result.
At the same time, though, CMS said that out-of-pocket spending in the 12-month period rose faster than in 2011, jumping to nearly 4 percent from 3.5 percent.
Business owners and consumers demanding greater openness and transparency from providers regarding price establishments is expected to be a major issue for the health care industry in 2014, according to a new projection report from the Health Research Institute of professional services firm PricewaterhouseCoopers.
