After two straight years of double-digit increases in employee benefit costs, employers nationwide can expect another increase of about 15 percent in 2003, a health benefits expert predicted this week.

        If such large increases continue, employers will be forced to make dramatic changes in health insurance coverage. And in this weakened economy, any new hit to the bottom line could mean less money for raises and capital investment.

        If the costs continue to rise, employers who paid about $5,500 per employee this year face paying more than $11,000 per employee five years from now, said Linda Cushman Ruth, senior health care strategist for Hewitt Associates, a national health benefits consulting company.

        “We really do have a catastrophe on our hands. There is no way employers can continue to handle these increases,” she said.

        Costs for employers are going up for several reasons. Hospitals that can't hire enough nurses and doctors who say their reimbursement is too low are demanding better contracts. New drugs and medical technology are driving up health expenses. Meanwhile, America's aging and increasingly obese population is gradually demanding more and more health care.

        “This is unsustainable. Something has to happen,” said Sharron DiMario, executive director of the Employer Health Care Alliance.

        As employers look for ways to cut health-benefit costs, employees face a wide range of potential changes. Some could hit as soon as next year; others may take several years.

        Many will see increases in payroll deductions for health coverage. Many also will see their health plans tinker with prescription drug coverage, such as requiring higher co-payments for more expensive drugs and changing which drugs are covered.

        Some plans may require, not just encourage, employees to use generics or mail-order services to get drug coverage.

        And in cases where many medications could be used to treat an illness, a few plans may start requiring enrollees to try using a cheaper drug before agreeing to cover a more expensive one.

        There will be more serious talk about medical savings accounts and disease-management programs.

        Eventually, the multitiered coverage that already requires higher co-payments for expensive medications may be extended to apply to doctors and hospitals.

        These concepts may sound foreign to some, but the common thread is a growing expectation from employers that employees become more involved in deciding how much coverage they need and paying for the consequences.

        “There's an entitlement mentality about health care. Consumers feel like it's not their job to deal with this,” Ms. Ruth said.

        Ms. Ruth was one of four health care and economics experts who spoke at the Drake Center in Hartwell on Wednesday at the annual “Four Forces Forecast.”

        More than 140 area health-care industry and business leaders gathered for the event, which was sponsored by the Greater Cincinnati Health Council, Employer Health Care Alliance and the Cincinnati Alliance for Healthcare Marketing.

        Hewitt's prediction of employer health benefit costs was based on national survey information gathered from large employers.

        Hewitt plans to release details about individual markets — including Cincinnati — in October.

        Area employers say coping with such increases won't be pleasant for anybody.

        A slowing economy has cut into demand for forklifts, dock equipment and other materials-handling equipment distributed by OKI Systems, which has eight locations in Ohio, Kentucky and Indiana.

        “Our business is about 25 percent off from a year ago. So it is very hard to absorb these increases,” said Jerry Schneider, the company's vice president of human resources. “It's not so drastic that we have to drop coverage, but it cuts into our ability to give raises and invest in new equipment.”

        A decade ago, employers turned to HMOs and other types of managed-care plans to offset years of rising costs.

        Those types of plans were controversial in their own right. But this time, HMOs won't be the answer, Ms. Ruth said.

        “Managed care has truly run its course,” Ms. Ruth said. “There really is no silver bullet anymore.”

        In Cincinnati, Humana Health Plan of Ohio Inc., has sold its new consumer-centric health plans to about a dozen companies.

        On Thursday, Anthem Blue Cross and Blue Shield announced it would begin selling a product called Anthem By Design to Ohio employers with fewer than 300 employees.

        Anthem's plan offers a “core” of basic benefits, then allows employees to “buy up” to get enhanced benefits or lower deductibles.

        So far, sales have been slow, said Larry Savage, president and CEO of Humana's Ohio office. Many employers have been hanging back, waiting to see how the new-style plans work out.

        “It has started to take root a little. Every payer is starting to think about these things,” Mr. Savage said.

        “The whole idea is to get consumers re-engaged in the process.”

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