Reining In U.S. Health Costs

Good news from the health-care front. For the first time in 10 years, the rate of growth in private-sector medical care premiums fell below the rate of overall inflation and medical inflation, according to a survey by KPMG Peat Marwick. Corporate cost-containment efforts through the widespread use of managed care plans, such as health maintenance organizations and preferred provider organizations, are clearly working. In its fifth annual survey of health benefits, the firm found that corporate health plan premiums increased an average of just 2.1% so far in 1995 vs. a 3.2% rise in overall inflation and a 4.6% advance in medical inflation. The improvements in limiting premium price increases are striking. As recently as 1991, premiums jumped by 11.5%.

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