Medical Costs Will Increase in 2011, Companies to Add Wellness Programs


According to a new report published by the PricewaterhouseCoopers LLP (PWC) Health Research Institute, employers across the nations can expect medical costs to increase by 9% in 2011. As a result, about two-thirds of companies intend to expand or improve wellness programs in an effort to reduce preventable medical conditions related to those expanding costs.

The report, called “Behind the Numbers”, includes findings of PWC’s Health and Well-Being Touchstone Survey of more than 700 employers from 30 industries as well executives from companies that provide health insurance for 47 million American workers and their families. Each year, PWC’s Health Research Institute releases the report that provides estimates on the growth of private medical cost trends.

Read: Worksite Wellness Programs May Retain Employees, Reduce Absenteeism


The largest contributor to insurance premium costs is hospital and physician costs, which make up about 81%, according to the survey. In 2007, an Emory University study found that preventable health behaviors such as smoking and obesity cause the illnesses that cost the US healthcare system about $100 billion each year. Chronic health problems such as heart disease, high blood pressure and arthritis also cost employers $1.1 trillion annually in lost productivity.

Adding an employee wellness program has many benefits to both the employer and employee. By adding programs such as smoking cessation, stress management and weight loss programs, companies can significantly reduce the cost of employee health care.

Read: Wellness Incentives Reduce Rising Health Benefit Costs

According to Health Promotion Advocates, a non-profit organization, provisions in the healthcare reform bill signed by President Barack Obama will make wellness programs more accessible. Starting in 2011, small employers will be able to receive federal grants to start wellness programs. In 2014, employers will be able to offer employees who participate in wellness programs up to a 50% discount on the cost of insurance coverage.