Private health plan spending growth slows in Minnesota, report finds

Spending by private health plans in Minnesota increased by 4.3% from 2006 to 2007, the lowest growth rate since 1997, according to a report released Tuesday by the Minnesota Department of Health, the St. Paul Pioneer Press reports.

According to Julie Sonier, director of the department's health economics program, "It is possible" that part of the slower growth in spending resulted from state efforts to reduce wasteful and inefficient health care and prevent chronic diseases (Olson, St. Paul Pioneer Press, 10/1).

The report also found that higher cost sharing by plan members likely contributed to slower growth in medical claims. According to the report, out-of-pocket expenses for private health plan members in 2007 increased by 14%. Sonier said, "It's too soon to say if it's a trend or how much is related to cost control" (Yee, Minneapolis Star Tribune, 9/30).

In addition, the report found that insurance premiums for privately insured state residents last year increased by about 8%, compared with a 5.9% growth rate in 2006. Prescription drug spending declined from 2005 to 2007 in part because of higher demand for low-cost generic medications and other cost-saving programs, according to the report. The report also found that hospital and physician services continued to drive the overall increase in health care costs (St. Paul Pioneer Press, 10/1).