HEALTH CARE COSTS: Experts Backtrack On Predictions

      In a "Comment on Business" column in today's Los Angeles Times, reporter David Olmos writes that even though "experts have been predicting a return to high single-digit or low double-digit medical inflation," a study by accounting firm KPMG Peat Marwick suggests that "those estimates have been overblown." The study found health care costs rose 3.3% nationally last year and 4.2% in California, "where managed care is more dominant and HMOs weakened by stiff competition are seeking sharp premium hikes." Jon Gabel of Peat Marwick said, "We anticipate a stable trend in health care inflation by historic standards, with only moderate rate increases foreseen over the next couple years." He is predicting a national increase of about 4.5% next year. The Times reports that the increase of 4.2% in California "is largely in line with recent price increases announced by several of the state's most influential purchasers of health care," including CalPERS, which saw an average rate increase of 5% and HIPC, which saw rates rise by an average of 4.3% (Olmos, 6/25).