Wage growth has been flat or anemic for years, so who are we to blame? A lackluster economy? Wealth hoarders in the top 1 percent? Competition from countries with lower wages?
It’s health care, at least according to a new report by HCMS Group, a company that specializes in population health management.
The report asserts that 30 percent of national health care spending is waste, due either to doctors over-treating and patients over-consuming medical services.
As a result, employers are pouring more of their budgets to pay for employee health care, which diverts dollars away from pay raises.
Evidence of the phenomenon came from HCMS’ database of 4 million employees at more than 300 employers.
In 2014, the study found, health care costs rose 10 percent for those employees, while worker pay only increased 4 percent. For those making less than $30,000 a year, pay only increased .5 percent, while health care costs rose 17 percent.
“People with the lowest incomes — notably women and single mothers — wind up paying the most for health care waste in the form of forgone wages,” said Hank Gardner, CEO of HCMS Group.
The good news is that, while health costs have indeed risen dramatically in recent years, so has the awareness that health care can be reformed to reduce spending. A recent study, for instance, showed that billions of dollars in cancer medication are thrown away every year simply because the drugs are distributed in vials with doses that exceed what most patients require for treatment.
The federal government is also taking major steps to tie Medicare reimbursements to quality of care, rather than for each service. Insurers are also increasingly pushing for such agreements with providers.