Analysis of the market by the consultancy shows in 2007 inflation was running at 10% with a compound inflation rate of 67% since 1999. By the end of 2008 the rate stood at 73%, marking a 6% increase.
Steve Clements, a principal in Mercer's health and benefits business, said: "Inflationary costs are easing from the 6% recorded in 2007, primarily due to deflationary pressures. But 4% is still a substantial increase given the current environment, and reflects the longer-term upward trend.
"There was a marked increase in scheme use from August 2008 onwards, which may well have been due to the stressful environment of the credit crunch as, anticipating redundancy or a reduction in health benefits in 2009, more people sought to make claims while they could. But average bill costs have remained fairly static over 2008, largely due to reduced inflationary pressures on medical treatment costs."
Cost of providing healthcare for employees increases by 4%
The cost of providing health benefits to employees increased by 4% in 2008 and the number of private medical insurance claims in the same period rose by 3%, according to Mercer.
