Health Care Costs Are Higher In Southeast Wisconsin

Research has shown that health care costs are significantly higher in Southeast Wisconsin than in other Midwest regions. There are a variety of reasons for the higher rates including slightly larger families, more choice in providers demanded by consumers, historically rich benefits packages and higher charges by some providers.

Ultimately, such disproportionate costs cannot continue if Southeast Wisconsin’s economy is to be maintained and prosper. It is a significant disadvantage to operate a business in this region because of these higher costs and that is one reason why BHCG was organized.

Consider the following facts:

• According to Mercer Health & Benefits 2006 National Survey of Employer-Sponsored Health Plans, Wisconsin employers pay some of the nation's highest costs for health care benefits. Health care costs in Wisconsin rose 5.7% percent in 2006, to an average annual employer cost of $9,766 per employee. Nationally, the average cost per employee rose 6.1% to $7,832 in 2006.

  Employers in the Midwest region experienced a 0.7% rise in health care costs, to an average employer cost of $7,634 per employee.

  Costs for employers based in Milwaukee with fewer than 500 employees saw costs rise by 7.0% in 2006, which was a faster rate than last year. Employers predict another 6.1% increase in average cost for 2007.
  [Source: Mercer Health & Benefits 2006 National Survey of Employer-Sponsored Health Plans]

• A Greater Milwaukee Business Foundation on Health, Inc. (GMBFH) study of Milwaukee community medical costs released in March, 2005 shows Milwaukee ’s unadjusted cost for medical services is 39% higher than that of other Midwest metropolitan areas. After adjusting for enrollee demographics, plan design differences, claim distribution and severity, and utilization, Milwaukee ’s health care costs are 27% higher than other Midwest metropolitan areas. The study is based on 2003 incurred claim data collected from 10 health plan administrators.

  This result demonstrates some improvement over the prior GMBFH study using 2000 incurred claim data that showed Milwaukee’s cost for medical services was 31% higher than other Midwest metropolitan areas, on an adjusted basis.
  [Source: Greater Milwaukee Business Foundation on Health, Inc. Study of Milwaukee Community Medical Costs, March 17, 2005]

• March 17th, 2005 - Three Year Study: The Cost Efficiency of Milwaukee 's Healthcare by Greater Milwaukee Business Foundation on Health

• In 2006, Milwaukee-based businesses paid an average of $10,058 a year for health care coverage per employee. That compares to employers in Chicago paying approximately $8,145 per employee per year; employers in Detroit paying approximately $8,068; employers in St. Louis paying approximately $7,881; and employers in Cincinnati paying approximately $7,976 (not adjusted for differences in enrollee demographics, plan design, etc.)
  [Sources:Mercer Health & Benefits 2006 National Survey of Employer-Sponsored Health Plans]
  
• According to Mercer Health & Benefits 2006 National Survey of Employer-Sponsored Health Plans, Milwaukee-based employers having 500+ employees are expecting health care costs to increase by 7.7% for 2007, before making changes to plan design. After making expected plan design changes, Milwaukee employers anticipate health care costs will increase 5.5% for 2007.
  
  Nationally, employers expect health care costs to increase 8.8% prior to plan design changes, and 6.4% after plan design changes.
  [Source:Mercer Health & Benefits 2006 National Survey of Employer-Sponsored Health Plans]

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