Health Care Inflation: It's Baaack!

Costs are shooting up--and by 1998, increases could hit double digits

Stephen N. Karp doesn't like what he sees in his crystal ball. The benefits vice-president for Miami-based Ryder System Inc. anticipates a 5% rise in health costs for 1997--a big jump after three years of below-inflation increases. But it's 1998 that has Karp really worried. He's hearing that health-care costs may climb by 10% or 12% as insurers hike administrative fees and hospitals and doctors forget about cost containment and press for rate hikes. "It's pent-up cost pressure," Karp says. Insurers, he figures, "will take a deep breath and pass on some of their increased costs to customers."

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