Byline: Michele Conklin Rocky Mountain News Staff Writer
Health care costs for large Rocky Mountain-based employers last year increased at more than four times the national rate, but total costs still were among the lowest in the country.
Companies with 500 or more employers based in the Rocky Mountain region paid 4.4 percent more in 1997 than the year before to provide employees and retirees with health care insurance, according to the 12th annual Mercer / Foster Higgins National Survey of Employer-Sponsored Health Plans released Monday.
That compares with an increase of just 0.9 percent nationally for large employers and 1.9 percent for large employers based in the West.
Despite the increase, however, Rocky Mountain employers are still paying less for health care. Large employers here on average paid $4,202 per year per employee for health benefits, compared with $4,369 nationally and $4,219 in the West.
Nationally, employers were able to keep their cost increases lower by converting to managed care - a phenomenon that had already happened in this region, said Jane Jensen, a principal in the Denver office of William M. Mercer.
``Nationally, we saw a big shift away from indemnity,'' or traditional insurance, Jensen said. ``We didn't see as much of a shift in the Rocky Mountain region, which already had quite a bit of managed care penetration.''
Only about 15 percent of employees nationwide continue to have traditional health insurance, the study found. Thirty percent of employees are enrolled in health maintenance organizations, the most restrictive form of managed care. The remainder are in preferred provider organizations or point-of-service plans, managed care plans that allow consumers more freedom in selecting and seeing physicians.
``Even though managed care has been embraced in this part of the country, many people still prefer some level of physician choice,'' Jensen said. ``Those preferences are being accommodated by employers.''
But the trend toward giving consumers less restrictive options may portend trouble, Jensen said. PPO and POS plans allow consumers more freedom, which could result in higher costs. If that is the case in the future, employers may move more toward HMOs, she said. Nationally and locally, businesses are expecting about a 7 percent increase in health care costs this year.
``Managed care is here to stay, there will continue to be choice and costs are inching up. Those are the three most significant findings,'' Jensen said.
