Solutions to the Spiraling Health Care Costs
Michael Jacobs
Principal
Mercer Human Resources Consulting

Americans have said “No” to managed care, but we have yet to agree on how we will pay for the increasing cost of health care, according to Michael Jacobs, an expert in managed care. The growing debate on health care, he suggested, will come down to answering these questions: “What do we need, what do we want, and who’s going to pay for it.”

Jacobs noted several key trends that are challenging the health care economy:

• a slowing economy,
• low inflation,
• the rising age of baby boomers,
• a rigorous regulatory environment, and
• increasing pressure for higher workplace performance.

As baby boomers age, Jacobs noted, health care utilization rates will inevitably increase, particularly the use of pharmaceuticals. But regardless of age, Americans require more health care services in large part because of “issues of individual choice.” Jacobs noted that 65% of Americans are overweight or obese, a condition that will eventually lead to numerous health care challenges from hypertension to strokes and heart problems.

Jacobs said medical costs will also increase because of higher consumer demand for new life-enhancing services, new technologies and drug therapies. These breakthrough treatments, however, can cost a patient as much as $7,000 a month.

To manage medical benefits more efficiently, Jacobs endorsed the concept of purchasing arrangements that can both reduce employer costs and ensure that health plan members receive the care they need.

Jacobs is a principal in the Atlanta office of Mercer Human Resource Consulting and a member of the Health and Group Practice and a member of the National Managed Pharmacy Practice Leadership Group. His focus includes working with clients and the pharmaceutical industry on the design, pricing, funding, impact, evaluation, administration and implementation of integrated pharmacy benefit programs.  He has over 20 years of experience in the pharmaceutical industry.

© 2003 National Conference on Public Employee Retirement Systems

  http://www.ncpers.org