Businesses in Orange County are expected to pay 7% more to provide health insurance for their workers this year, or some $429 more per employee on average.
The projected hike will put the average OC employer’s 2014 healthcare costs at $11,605, according to a recent report by Aon Hewitt Inc., a Chicago-based human resources consulting company with a Newport Beach office.
The projected increase is slightly higher than 2013’s average OC employer premium increase of 6.9%. Aon Hewitt previously predicted an increase of 6.5% but adjusted it up.
Its 2014 OC projection is on the lower end of increases over the past six years. Healthcare premium rates rose 8.2% in 2011 and 10.1% in 2010.
Orange County’s projected healthcare costs are a bit higher than the national average in terms of actual dollars and on a percentage basis. Aon Hewitt is predicting national rates will be 6.7% higher in 2014. Nationally, employers are expected to pay $11,176 per worker.
A key reason for the price difference between OC and the country as a whole is the prevalence of health maintenance organizations in Orange County, according to Johan Dekeyzer, an Aon Hewitt senior vice president in Newport Beach. HMOs use what are known as “capitated” approaches through which plans give contracted providers a set monthly amount to care for plan members.
“HMOs have benefit designs that are richer,” Dekeyzer said. “Rich benefits cost more.”
Employers in the rest of the U.S., by contrast, have been “quicker and more aggressive” in adopting what’s known as consumer-driven healthcare, he said.
Consumer-driven healthcare usually encompasses a high-deductible health insurance policy with health savings accounts and generally seeks more financial participation from patients.
“The rest of the country is more accepting of [consumer-driven] concepts,” Dekeyzer said.
He said some of his clients have been considering more consumer-driven healthcare because they dislike cost increases, but their workforces “are not ready for change.”
Health insurance industry fees imposed by the Affordable Care Act will also affect price increases, he said.
OC was also one of the major U.S. healthcare markets that experienced rate increases higher than the national average. Those included Los Angeles, which was also at 6.9%; Washington, D.C., at 5.3%; and San Francisco/Oakland/San Jose, at 4.8%.
Aon Hewitt derived its study data from its Health Value Initiative database, which has cost and benefits information for 516 large U.S. employers representing 12.8 million plan participants, 1,200 plans, and $61.2 billion in 2013 healthcare spending, according to London-based Aon PLC.
Works on Eyes and Telescopes
Abbott Medical Optics, a Santa Ana-based unit of Abbott Laboratories in Chicago, introduced the iDesign Dx device for use in Lasik and other refractive surgeries.
Abbott said in a news release that NASA also used the technology to measure and precisely shape mirrors in the James Webb Space Telescope to ensure it transmits high-resolution images of deep space back to Earth after it launches in 2018.
IDesign DX measures the entire optical system and individual components of the eye, according to Abbott.
The company said the device can capture the shape of the cornea; its curvature and power; the ocular wavefront; a patient’s refraction, which is how light passes through the eye; and pupil diameter under different lighting conditions, all in one scan.
Eye devices accounted for $826 million in sales for Abbott through the first three quarters of 2013. The company is set to release its fourth-quarter and 2013 financial results this month.
Abbott mentioned that a related product, the iDesign Advanced WaveScan Studio, is not yet approved in the U.S. but is sold in Europe and other countries, including Canada, Japan and New Zealand.
Eye Surgery Company Bought
Costa Mesa-based IOP Ophthalmics Inc. was acquired by Katena Products Inc. of New Jersey last month. Financial terms weren’t disclosed.
IOP develops, commercializes and distributes specialty eye surgery devices and biologics.
Katena makes eye surgical instruments and related products and sells them in more than 110 countries, according to a news release.
Jason Malecka, IOP’s founder and president, and Erich Ziegler, its vice president and chief financial officer, will remain with the combined company.
Bits and Pieces
California Stem Cell Inc., an Irvine-based startup, said it completed a first-phase clinical trial for treating fourth-stage hepatocellular carcinoma, an advanced form of liver cancer. The trial, conducted in Shanghai, involved eight patients who received California Stem Cell’s DC-TC stem cell treatment. … Kareo Inc., an Irvine-based provider of medical office software and services, said it was the fifth fastest-growing healthcare technology company on Deloitte’s Technology Fast 500 list. Kareo provides cloud-based software for smaller medical practices.
