Milliman Health cost study: Facilities outmuscle physicians

By National Underwriter

National Underwriter

By Allison Bell

Hospitals and outpatient facilities seem to be doing a significantly better job at bargaining for higher rates from employer-sponsored health plans than physicians are this year.

Analysts at Milliman Inc., Seattle, have published data supporting that conclusion in their 2012 Milliman Medical Index report.

The analysts uses Milliman care cost guidelines data to estimate the average health care costs for a typical U.S. family of four receiving health care through an employer-sponsored preferred provider organization (PPO) plan.

The average cost has increased 6.9%, to $20,728.

The average rate of increase is down from 7.3%, and the average rate of increase is the lowest the Milliman analysts have recorded since it started doing the study 10 years ago.

The analysts found that costs continue to rise more rapidly for some types of care than for others.

Hospital costs are up 7.6%, and outpatient care costs are up 8.6%.

Physician costs are up just 5%.

Milliman Medical Cost Study

Increases in the cost of care components between 2011 and 2012

Inpatient 7.6%
Outpatient 8.6%
Physician 5.0%
Pharmacy 7.3%
TOTAL 6.9%

Originally published on