Since 1997, health benefit costs have increased nearly 73 percent. If current trends continue, costs could more than double in the next five years. With these kinds of increases, is there any hope that we can sustain the present system? Not likely, experts say.

Although there is no wide-spread consensus on a solution, those who deal with the spiraling cost of benefits agree we must make fundamental changes in the way we view and use health care. And we must do it soon.

“There is a confluence of factors – a kind of ‘perfect storm’ – influencing the cost of health care today,” says Seth Garber, M.D. Garber works as a physician consultant to Mercer Human Resource Consulting and in the Quality Improvement Department at Kaiser Permanente.

“Our population is aging, medical technology and drug development are advancing rapidly and people are living longer and using more medical services,” he says. “Plus, those services are more expensive than ever before.”

It’s not just a matter of the unit cost of a high-tech procedure, he adds. It’s also important to look at how many people are having the procedure. It’s the total cost of health care that employers – and employees – need to be concerned about.

All costs are shared costs

It’s obvious “we’re all in this together.” Part of every dollar employees and employers contribute to their health plans pay for the care of others: the uninsured, the underinsured, those covered by Medicare and Medicaid.

Hospitals and doctors must provide care, regardless of ability to pay. So they shift unpaid costs to their insured patients – resulting in about 7 percent more in premium costs per year.

The movement toward consumer-driven health plans is based on the premise that the more you know, the wiser your health care decisions will be. But when you’re on your way into the emergency room with a heart attack, you probably aren’t thinking about how much it will cost to keep you alive.

“Twenty percent of people spend 80 percent of the health care dollars,” Garber says. “Even if you teach them to be good consumers, a lot of their spending is not discretionary or subject to much change.”

How much is enough?

Garber points to several strategies that may help to get our health care spending under control – but they’re not easy to carry out, he says.

“First and perhaps most difficult, we need to decide how much is enough,” he says. “Should we do heart bypass surgery on an 80-year-old? Is it reasonable to provide the latest, high-cost drug when a generic may give the same results? Setting priorities for spending our limited resources is one of the most controversial aspects of health planning.”

“Our society highly values individual freedom,” Garber says. “We have a great tradition of protecting the sick and elderly. Costs will continue to rise, however, until we decide as a society that our current level of knowledge and care is enough – and no one is willing to say that.”

True health maintenance

The second strategy for containing benefit costs is to provide comprehensive care for those with chronic conditions. Diabetics, heart patients, and others may avoid crises and spend less on care when they have the training, tools, medications, and encouragement to stay as healthy as possible.

Instead of depending on doctors to monitor their conditions, these patients can learn to take an active role in their own treatment. The sooner a problem is addressed, the less likely it is to become an emergency.

Healthy people can benefit from preventive care as well. Immunizations, prenatal care, regular checkups, and tests can help you avoid the chronic illnesses that plague so many older adults. A healthy diet, exercise, and keeping away from cigarettes greatly increases your chances of living a longer, healthier life and using fewer expensive health services.

“We have to work on all segments of the population at once,” Garber says. “We can’t just focus on one group. The discussion needs to be less about how we are going to pay for care and more about how we are going to improve care for everyone.”

Despite the pressure to reduce costs by cutting benefits, Garber urges employers to look at the total value, rather than simply the cost of premiums. Better preventive care can result in less absenteeism, higher productivity, and savings of both time and money.

For example, statistics show that most people with chronic asthma are under-treated. Providing them with more and better medications will increase short-term health care costs. But those same people will be feeling better, less likely to take sick days or end up in the emergency room.

“Slowing the increase in costs isn’t simply a matter of slashing benefits,” Garber says. “Employers need to consider the value of having healthier employees. Sometimes you have to invest more to save money in the long run.”