Ilovebenefits’s Blog

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Averages in Health Care

Editor’s note: If you are interested in learning more about those ‘average’ premium increases and what it is all about read this article.

In 2007, the average temperature in the U.S. in was 54.2 degrees. The average household spent $1,300 for energy. The average increase for health insurance premiums between 2007 and 2008 was 5%, according to the 2009 Employer Health Benefits Survey from Kaiser and the Health Research & Educational Trust.

What do these numbers have in common? Well, for one thing, they’re averages, which means they represent lots of numbers that can be significantly different from the average.

Further, the separate numbers that are averaged together each can have very different factors that contribute to their individual values – such as the weather in Alaska vs. Texas, electricity costs in San Francisco vs. Des Moines, or health care cost increases for a unionized manufacturing company in Baton Rouge vs. a software company in Cleveland.

Averages create a blur, a number that in many cases is overly general and not well-defined. Even when some facts are known about a statistical average, it often has little real-world value. For example, it’s highly doubtful that residents of southern Florida would make clothing choices based on the average U.S. annual temperature.

Now, keep reading, it is about to get very interesting.


March 4, 2010 - Posted by | Cost, healthcare, insurance | , ,

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