Rising Health Care Costs are Unsustainable

The cost of insurance premiums and employee medical claims is at an all time high and continues to rise. Business leaders are being called upon to make changes at the workplace in order to curb rising costs. Many are turning to workplace health programs to help employees adopt healthier lifestyles and lower their risk of developing costly chronic diseases.

National Health Expenditures

• In 2007, national health care expenditures in the United States totaled $2.2 trillion or 16% of its gross domestic product, a 14% increase from 2000.³ This represents an average of more than $7,400 per person
• Each year in the United States, chronic disease such as heart disease, stroke, cancer, and diabetes cause 7 in 10 deaths and account for about 75% of the $2 trillion spent on medical care⁹
  • In 2009, the economic costs of cardiovascular diseases and stroke were estimated at $475.3 billion, including $313.8 billion in direct medical expenses and $161.5 billion in indirect costs ($39.1 in lost productivity due to sickness or disability and $122.4 lost productivity due to premature death)¹⁰
  • In 2007, medical costs attributed to diabetes included $27 billion for care to directly treat diabetes, $58 billion to treat diabetes-related chronic complications attributable to diabetes, and $31 billion in excess general medical costs¹¹
  • In 2008, the estimated health care costs related to obesity were $147 billion¹²
• Personal health expenditures which include such services as physician visits, hospital care, dental care, prescription drugs, and nursing home care accounted for 84% of national health care expenditures in 2007³
• Private health insurance paid for 36% of these personal health expenditures³

Employer Coverage and Costs

• In 2007, private health insurance obtained through the workplace for individuals less than 65 years of age was the major source of insurance covering 157.9 million people or 61.6% of the population³
• Since 2000, health insurance premiums for a typical family of four have increased by 114% proving costly for both employers and employees ⁴
• Average annual premiums for employer-sponsored coverage are $5,049 for single coverage and $13,770 for family coverage in 2010⁴
• In 2006, employers spent nearly $87.6 billion on workers’ compensation, but this represents only a portion of the total work-related injury and illness costs borne by employers, workers, and society overall, including cost-shifting to other insurance systems, as we as most costs of work-related illness¹⁴

Employee Costs

• Workers on average contribute $694 annually toward the cost of single coverage and $3,281 annually toward the cost of family coverage⁴
• Since 2000, annual worker contributions have increased by $293 for single coverage and by $1,354 for family coverage¹³
• Individual employees also pay for health care services through deductibles, co-payments, or coinsurance⁴