PRESS RELEASE
November 9, 2006

Contacts:
Stephen Kroes, Utah Foundation Executive Director
(801) 355-1400, ext. 5
(801) 573-8824 (mobile)

Elizabeth Escandon, Utah Foundation Research Analyst
(801) 355-1400, ext. 6

Greg Fredde, Vice President, Merit Medical Systems
(Member of Employers Healthcare Coalition)
(801) 208-4262

Printable Version

UTAH FOUNDATION RELEASES STUDY ON EMPLOYER HEALTHCARE COSTS

Utah Foundation today released its October report, focused on rising healthcare costs for employers and employees. This report is part one of a two-part series. This report examines data and trends on healthcare costs and coverage for Utah and the U.S., with a review of national studies on the factors driving healthcare inflation. The report also provides the findings of focus groups conducted by Utah Foundation with business people, insurers, hospital managers, and physicians. These focus groups provided valuable insight on Utah’s unique healthcare challenges and ideas for reform.

This research project was undertaken at the request of the Employers Healthcare Coalition, a group formed by the Salt Lake Chamber. Part two of this two-part series will provide an analysis conducted for the Employers Healthcare Coalition of five healthcare reform ideas selected after review of the findings of this report.

The current report, entitled "Controlling Healthcare Costs, Part One: Understanding the Factors Driving Healthcare Inflation," is attached to this release. It is also available online at www.utahfoundation.org. Highlights of this report include the following:

• Despite a history of being better than the nation, Utah now exceeds the national average in uninsured rates.
• Employers have been reducing or eliminating health insurance coverage for employees as costs rise, leading to greater uninsured rates.
• As the costs of uncompensated care are shifted to the insured, employer costs rise, leading to more reductions in employee health benefits.
• Utah firms are less likely than those in other states to provide health insurance to employees.
• Drivers of rising healthcare costs include increased consumer demand, broader-access health plans, hospital consolidation, new treatments and technologies, defensive medicine, cost shifting from uncompensated care, the aging population, and a trend toward unhealthy lifestyles.
• Increases in health costs also impact public budgets; nationally, state Medicaid costs recently began to exceed state K-12 education spending.
• According to focus groups with Utah business people, insurers, hospital managers, and physicians, reforms should focus on limiting defensive medicine and overutilization, promoting healthier lifestyles, making better information available on quality and costs, incentives for greater quality, and other efforts to make coverage more affordable and promote wider coverage.

Because of the complexity of healthcare policy, this is the largest project Utah Foundation has undertaken in many years. Regarding the findings in this report, Utah Foundation Executive Director Steve Kroes said, "This report provides a wealth of information to help business people, policymakers, and citizens understand the causes of healthcare inflation. By promoting greater understanding on this complex issue, we hope to support an environment in which well-reasoned, workable policy solutions are crafted."

Greg Fredde, Vice President of Merit Medical Systems and a member of the Employers Healthcare Coalition steering committee, said "Like other companies, we struggle to continue providing quality healthcare benefits to our employees in the face of rising costs. We and other members of the Coalition plan to work with policymakers to make healthcare more affordable for all Utahns. Utah Foundation’s work has been invaluable for understanding these issues and we look forward to the next step – discussing reform ideas."

Part two of the report, providing analysis of five healthcare reform ideas selected by the Employers Healthcare Coalition, will be released about one week from now.

Utah Foundation is a public policy research group that promotes a thriving economy, a well-prepared workforce, and a high quality of life for Utahns through research and practical, well-reasoned recommendations for policy change.