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Segal Survey Predicts Declines in Trends for Fifth Consecutive Year

Thursday, September 20, 2007 General News J E 4
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NEW YORK, Sept. 19, The 2008 Segal Health Plan Cost TrendSurvey forecasts continued declines in trends for 2008, marking the fifthconsecutive year of declining medical trends. And, although a growing numberof health plans project single-digit trends for 2008, health plan costs trendsare still significantly above general inflation. Key findings include:

The 2008 Segal Health Plan Cost Trend Survey compares historical forecaststo actual cost increases. The Survey reports projections for 2008 obtainedfrom a survey of managed care organizations, health insurers, pharmacy benefitmanagers and third party administrators. The survey also covers trend ratesfor PPOs and HMOs, Medicare Advantage plans, dental and vision care plans.

According to Edward A. Kaplan, Segal's National Health Practice Leader,"The most successful plan sponsors are examining detailed claims data todetermine what diseases, conditions, facilities and treatments are drivingcost increases. Then they are using integrated data mining to develop targetedintervention strategies to identify gaps in needed treatment for participants,poor quality health care delivery to participants and ways they can improvethe health and health care consumption of their participants and reduce healthtrends to manageable levels."

The complete survey report can be found at:

www.segalco.com/publications/surveysandstudies/2008trendsurvey.pdf

The Segal Company (www.segalco.com) is an independent, US-based firm ofbenefit, compensation and human resources consultants. Clients includecorporations, non-profit organizations, professional service firms, state andlocal governments and joint boards of trustees administering pension andhealth and welfare plans under the Taft-Hartley Act.-- Over the past five years, projected trend rates for point-of-service (POS) medical plans (including prescription drugs) for actives and retirees under 65 has declined from a high of 14.9% in 2003 to 10.5% for 2008. -- Prescription drug projected trends have declined dramatically, by nearly nine percentage points, since their high of 19.5% in 2003. www.segalco.com/publications/surveysandstudies/2008trendsurveysupplement.pdf -- Price inflation appears to be the biggest element of overall medical plan trend, accounting for approximately 60% of overall projected preferred provider organization (PPO) trend in 2008. -- The survey found some regional variation in medical trend projections - ranging from a low of 9.4% in the Midwest to a high of 11.7% in the West.

SOURCE The 2008 Segal Health Plan Cost Trend Survey
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