Tuesday PM June 17th, 2008

PricewaterhouseCooper: employer healthcare costs to rise almost ten percent this year; Employee Benefit Solutions: Houston employers enjoy downward trend in healthcare costs…Home sales in Houston fall again…

Employer health care costs are poised to rise almost ten percent this year and nearly that much again in 2009 according to an industry report. That's more than double the annual inflation rate. The study by PricewaterhouseCooper predicts that medical costs will increase 9.9 percent in 2008 and an additional 9.6 percent in 2009. The head of the PricewaterhouseCooper's Health Research Institute says "health care providers, insurers and employers will have to monitor medical costs carefully if we are to avoid a resurgence of the double-digit annual increases seen in the past." The report identifies a hospital building boom and the expenses insured people are paying for the uninsured as two factors driving the increase.

Another recent survey by Employee Benefit Solutions indicates that health care costs for Houston employers reflects a downward trend over the past three years. Jim Watt is president of EBS.

"What we've learned in over the course of the last couple of years is when we have a healthy economic time, we see deflation in health care costs, and this year's no different. In 2008, the results reveal a 4.6 percent rate of increase, which is very, very healthy, relative to years past—even relative to 2007, which was a 5.6 percent increase."


Watt says historical patterns reflect modest cost growth in healthy economic times.

"So when there's uncertainty in their workplace—the possibility of layoffs—you'll see a greater usage of health plans, for a variety of different reasons." Ed: "You mean like people just go ahead and get things they've been putting off, maybe go ahead and get it done?" "Exactly. We see that in any industry, depending on what is happening in the current economy."


The EBS Healthcare Cost and Benefit Trends Survey polled 142 area employers. About one in nine Houstonians are represented as an employee or dependent in the plans measured by the survey.

Meanwhile, the nation's hospital systems are healthy, according to Modern Healthcare's annual Hospital Systems Survey, as reported in the Houston Business Journal. Hospital system revenue from patient care grew 8.4 percent in 2007, compared to 2006. Profits jumped 23.8 percent.

Single-family home sales in the Houston area fell again in May, according to the Houston Association of Realtors. Sales reflect a 15.3 percent drop compared to the same month last year. But the average price of homes rose for the fourth consecutive month to the second-highest level ever—rising by 0.6 percent to $214,732.

The Commerce Department reports new home construction nationally dropped 3.3 percent last month as builders pulled back further given the market's slump.

Foreclosures are up 16 percent so far this year in Harris County, according to The Woodlands-based Foreclosure Information & Listing Service. Posting for properties with delinquent mortgages are up 18 percent.

The U.S. Naval Academy is the scene today of high-level talks between the U.S. and China, with energy expected to be a key topic. The two sides come together for two days of discussions as global oil prices continue to hover near, or set new records. The two nations are the world's largest importers of oil and China is the world's biggest consumer and producer of coal. Pollution from China's coal-fired industries is believed to be a major factor in global warming. The U.S. trade deficit with China has jumped to an all-time high of $256.2 billion, the largest deficit ever recorded with a single country.

Treasury Secretary Henry Paulson says the United States and China have a strong mutual interest in avoiding energy supply disruptions. Paulson said at the start of two days of the high-level discussions in Maryland that the two nations need to intensify efforts to cooperate on a variety of energy and environmental issues. The Treasury Secretary said that the two countries, as the largest importers of oil, face similar challenges amid increasing global demand for energy. He spoke at an opening session of a conference attended by the Bush administration's top economic policymakers and their counterparts from Beijing.

Bio photo of Ed Mayberry

Ed Mayberry

Local Anchor, All Things Considered

Ed Mayberry has worked in radio since 1971, with many of those years spent on the rock 'n' roll disc jockey side of the business...