Medical costs rise to $12,214 per family

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The typical American family of four will use $12,214 worth of medical products and services this year, according to a study released yesterday.

The family -- a hypothetical set of two adults and two children younger than 10 -- will pay about 17 percent, or $2,035, of that cost, and health insurance would pick up the rest of the tab, said the study by Milliman Inc., a Seattle consulting and actuarial firm.

The report, which used a database of more than 15 million insured Americans, examined the medical costs for a family covered by a preferred provider organization (PPO) health plan.

These plans have networks of doctors who agree to provide medical services at a discount to a group of employees.

"We have seen a lot of surveys looking at what has happened to employer medical costs, but they don't get into the drivers of medical costs for consumers," said Bill Thompson, co-author of the study, in a conference call yesterday.

The report focused on health care costs for consumers at the point of service. Those costs include doctor visits, hospital stays, prescription drugs and other medical needs.

However, the study did not include the premiums that consumers pay for their health insurance. The employee share of health insurance rates for family coverage rose 10.4 percent last year, according to the latest information from the Kaiser Family Foundation, a Menlo Park, Calif., health care policy organization.

Mr. Thompson said the Milliman study, the first of an expected annual look at consumer health care costs, did not include health insurance premiums because they were too varied.

"It was too complicated to come up with a good, single measure, but it is something we want to have in future studies," he said.

For the other medical spending by families, the average total jumped 45 percent from $8,414 in 2001 to an expected $12,214 this year, the study said.

The biggest expense for families is physician visits, with 37 percent, or $4,528, of the 2005 total cost going toward those visits.

That cost, which includes regular visits to the doctor and specialty or surgical care, is up 8 percent, or $337, from 2004. More frequent visits accounted for part of the increase, the study said.

The second-largest expense for 2005 was in-patient hospital services at 30 percent, or $3,704, of a family's total cost. The study cited new technology, longer stays and higher operating costs as factors.

Prescription drugs followed, taking up 15 percent, or $1,785, of a family's medical costs. Although prescription drugs are not the largest cost, they are the fastest-growing segment of health care costs.

Higher drug prices, more medications on the market, a greater number of prescriptions filled and direct-to-consumer advertising have continued to push up that expense, the study found.

With health care costs expected to keep rising, families should expect businesses to shift more of those costs onto consumers, Mr. Thompson said.