Understanding Health Care Costs

Anthem has recently published a very informative brochure on the rising cost of insurance premiums and how they relate directly with the cost of health care. According to data compiled from Fortune magazine's "Fortune 500 annual Ranking of America's Largest Corporations," 2008, The health care industry average profit margin was only 2.2% compared with the Pharmaceuticals industry average of 19.3% and medical products and equipment averaged 16.3%.

For a more detailed look at the high cost of health care, rising insurance premiums and what Anthem is doing to help control them, please use this link to pull up the brochure. Getting to the Bottom of health care costs

Interesting facts:

In 2007 the U.S. spent $2.2 Trillion on healthcare 1
In 2010 the U.S. is projected to spend $2.6 Trillon 1
In 2018 the U.S. is projected to spend $4.4 Trillion 1
On average, 87 cents of every dollar you pay Anthem is spent covering medical care and services that members receive like doctor visits, hospital costs, prescription drugs and more.2
Private health insurers spend over $339.2 billion in order to comply with government health care regulations. more than half of the money is spent on regulatory costs such as filing and reporting requirements.7
Between 1997 and 2007, prices for prescription drugs grew at an average rate of two-and-a-half times inflation.13

1 Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistic Group, at
http://www.cms.gov/NationalHealthExpendData/downloads/NHE_Extended_Projections.pdf
2 PricewaterhouseCoopers' Health Research Institute "Share of Benefit Premiums" Medical Cost Trend for 2009.
3 Kaiser Health News. June 19, 2009
4 Sarah Goodell, M.A. and Paul B. Ginsburg, Ph.D., "High and rising health care costs: Demystifying U.S. health care spending,"
October, 2008. http://www.rwjf.org/pr/product.jsp?id=35368 (accessed April 27, 2010).
5 Businessweek, "Behind Rising Health-Care costs'" July 14, 2008.
http://www.businessweek.com/technology/content/jul2008/tc2008079_279097.htm (accessed April 27, 2010).
6 "Hospital & Physician Cost Shift: Payment Level Comparison of Medicare, Medicaid, And Commercial Payers," Milliman,
December 2008
7 Conover, Christopher J. "Health Care Regulation: A $169 Billion Hidden Tax." October 4, 2004.
http://www.cato.org/pub_display.php?pub_id=2466 (accessed April 22, 2010).
8 PriceWaterhouseCoopers, "The Factors Fueling Rising Health Care Costs 2008" December 2008.
9 Thorpe, et al, Health Affairs, June 2005.
10 Will Dunham, More Americans getting multiple chronic illnesses, Thomson Reuters, January 2009.
11 http://www.rand.org/health/feature/forty/health-services-utilization-study.html (accessed (accessed April 21, 2010).
12 National Health Care Anti-Fraud Association "The Problem of Health Care Fraud."
http://www.nhcaa.org/eweb/DynamicPage.aspx?webcode=anti_fraud_resource_centr&wpscode=TheProblemOfHCFraud
(accessed April 4, 2010).
13 Kaiser Family Foundation & Sonderegger Research Center: "Prescription Drug Trends" A Chartbook Update, November
2006; Blue Cross Blue Shield Association
14 Compiled from data from Fortune magazine's "Fortune 500 Annual Ranking of America's Largest Corporations," 2008
This content is provided solely for informational purposes: it is not intended as and does not constitute legal advice. The
information contained herein should not be relied upon or used as a substitute for consultation with legal, accounting, tax and/
or other professional advisors.
Anthem Blue Cross and Blue Shield is the trade name of: In Colorado and Nevada: Rocky Mountain Hospital and Medical Service,
Inc. In Connecticut: Anthem Health Plans, Inc. In Indiana: Anthem Insurance Companies, Inc. In Kentucky: Anthem Health Plans
of Kentucky, Inc. In Maine: Anthem Health Plans of Maine, Inc. In Missouri (excluding 30 counties in the Kansas City area):
RightCHOICE® Managed Care, Inc. (RIT), Healthy Alliance® Life Insurance Company (HALIC), and HMO Missouri, Inc. RIT and
certain affiliates administer non-HMO benefits underwritten by HALIC and HMO benefits underwritten by HMO Missouri, Inc.
RIT and certain affiliates only provide administrative services for self-funded plans and do not underwrite benefits. In New
Hampshire: Anthem Health Plans of New Hampshire, Inc. In Ohio: Community Insurance Company. In Virginia (excluding the
City of Fairfax, the Town of Vienna and the area east of State Route 123.): Anthem Health Plans of Virginia, Inc. In Wisconsin:
Blue Cross Blue Shield of Wisconsin ("BCBSWi"), which underwrites or administers the PPO and indemnity policies; Compcare
Health Services Insurance Corporation ("Compcare"), which underwrites or administers the HMO policies; and Compcare and
BCBSWi collectively, which underwrite or administer the POS policies. Independent licensees of the Blue Cross and Blue Shield
Association. ® ANTHEM, MyHealth@Anthem and 360° HEALTH are registered trademarks of Anthem Insurance Companies,
Inc. The Blue Cross and Blue Shield names and symbols are registered marks of the Blue Cross and Blue Shield Association. In
California, Anthem Blue Cross is the trade name of Blue Cross of California. Independent licensee of the Blue Cross Association.
® ANTHEM is a registered trademark of Anthem Insurance Companies, Inc. The Blue Cross name and symbol are registered
marks of the Blue Cross Association. In Georgia, Blue Cross and Blue Shield of Georgia, Inc., is an independent licensee of the
Blue Cross and Blue Shield Association. The Blue Cross and Blue Shield names and symbols are registered marks of the Blue
Cross and Blue Shield Association. Services provided by Empire HealthChoice HMO, Inc. and/or Empire HealthChoice Assurance,
Inc., licensees of the Blue Cross and Blue Shield Association, an association of independent Blue Cross and Blue Shield plans