Healthcare costs are infringing on income gains

Wednesday, 07 September 2011 16:00

News - Health Care Costs

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A study conducted by the nonprofit RAND Corporation reveals that over the past decade, income gains have amounted to an extra $95 per month for U.S. families when taking into account the rise in healthcare costs.

By comparison, if the cost of insurance, pharmaceuticals and medical procedures had grown in proportion to that of other goods and services, American families would have experienced a $545 increase in monthly income.

"Accelerating healthcare costs are a primary reason that the so many American families feel like they are just treading water financially," said lead author David Auerbach. "Unless we reverse the trend, Americans increasingly will notice that health costs compromise their other spending options."

The researchers examined costs and income from 1999 to 2009, and found that spending on healthcare increased from $1.3 trillion to $2.5 trillion. For individuals, costs went from an annual expenditure of $4,600 in 1999 to $8,000 in 2009.

Results of this study suggest that employee wellness programs aimed at reducing workplace stress and improving staff health may help curb the cost of employee health benefits, which may be good for both worker and employer.