The cost of health care for American families inemployer-sponsored preferred provider plans continues to rise,albeit more slowly, according to the 2017 Milliman Medical Index released byMilliman, Inc., a Seattle-based consulting and actuarial firm.

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The cost of health care for the typical American family of fourin an average PPO plan is $26,944, compared to $25,826 in 2016.While the dollar amount remains high, the index’s annual rate ofincrease is 4.3 percent, the lowest rate since the firm begantracking the MMI in 2001.

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The report’s authors attributed the slowing pace to aconcomitant slowing of rate increases in hospital spending,professional services costs and pharmaceutical costs.

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“Proactive medical management can also lower costs by ensuringthat the right amount of care is provided in the least intensive,lowest cost, and yet medically appropriate, treatment settings,”the authors write. “For example, providers may deliver more oftheir care on an outpatient basis, and order fewer diagnostic testsand prescriptions. Narrow network plans may favor such providerswho use care management techniques to better coordinate care andminimize unnecessary utilization of services.”

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For the first time since 2013 and 2014, the typical family offour’s prescription drug trends have decreased in two consecutiveyears, though the prescription drug cost increase of 8 percent ismore than double the medical increase of 3.6 percent, according tothe report.

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The authors attribute the slowing pace due to a number offactors: Heightened public scrutiny has caused numerous drugmanufacturer chief executives to take the “price hike pledge” tohold price increases below 10 percent; some pharmacies are reducingthe prices of certain drugs so they can participate in preferredpharmacy networks, in hopes of driving in-store sales ofnon-pharmacy products that provide higher profit margins; and theuse of drug rebate programs is rising -- though the impacts of suchprograms can be elusive for the typical patient if the rebateoccurs after the point of sale and is paid back to the planadministrator and not the patient.

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“Rebates paid after the point of sale effectively operate likereverse insurance, requiring some of the highest-cost patients topay more out-of-pocket and then spreading the savings among allhealth plan members in the form of lower premium rates,” theauthors say.

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“Given these complicated issues, PBMs are responding by comingout with programs that embed manufacturer rebates in point-of-salepricing at the pharmacy to directly benefit consumers who spend themost on prescription drugs.”

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The report also says employees now pay for about 43 percent ofhealth care expenses and employers pay the other 57 percent. Thedifference between these two shares has gradually narrowed since2001, when employees contributed 39 percent and employerscontributed 61 percent.

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Related: 10 misconceptions about saving for medical care inretirements

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The authors note health care providers receive higher paymentfor patients in employer-sponsored plans for the “exact samebasket” of services, than they do for other insured patients.

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Katie Kuehner-Hebert

Katie Kuehner-Hebert is a freelance writer based in Running Springs, Calif. She has more than three decades of journalism experience, with particular expertise in employee benefits and other human resource topics.