Milliman: Annual Healthcare Costs Doubled in Under Nine Years

It has taken less than nine years for healthcare costs to double for the average family of four covered by a preferred provider organization, the 2011 Milliman Medical Index shows.

And there's more bad news, employers are passing more of the costs onto their employees.

The 2011 MMI healthcare cost is $19,393, a 7.3% or $1,319 increase over 2010. But here's some good news, that's the lowest annual rate of increase in more than a decade.

The report looks at five components of the MMI: inpatient facility costs, outpatient facility costs, professional services, pharmacy and other. Among the findings:

• Hospital inpatient costs accounted for more than one-third of the $1,319 increase. While utilization was flat, costs per day increased by more than 8% from 2010 to 2011. Inpatient costs totaled $6,068 or 31% of a family of four's total annual healthcare bill.
• Increased utilization helped grow the cost of outpatient facility care by 10% to $3,404. For the third year the increase in the cost of outpatient facility care outpaced all of the other MMI components.
• The total dollars paid for physician care increased by 4.4% to $6,329. Physician services accounted for one-third of the total cost of care.
• Pharmacy costs rose by 8% to $2,847. Higher average drug prices accounted for about 75% of the increase with higher usage accounting for just 25% of the increase.
• The cost of miscellaneous other services such as durable medical equipment, ambulance services and home health posted a 6.9% increase to $745.

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