After five years of steady decline, the growth rate of medical costs will level off at 9.6% in 2009, followed by a possible increase in growth rates, predicts a new study by PricewaterhouseCoopers.

Although it is not a perfect barometer, the growth of medical costs is often considered a good predictor of the growth of premiums.

"With medical cost growth already exceeding the overall inflation rate and inflation heating up in so many other sectors, health care providers, insurers and employers will have to monitor medical costs carefully if we are to avoid a resurgence of the double-digit annual increases seen in the past," said David Chin, M.D., leader of the Health Research Institute.

Cost management strategies display an increased focus on cost-sharing by workers, substitution of lower-priced treatments and generic drugs, and plan designs that encourage workers to engage in healthy behaviors through incentives. This represents a change from so-called cost-shifting strategies used by employers, such as increasing co-payments or deductibles.

Some of the key factors that will drive the projected increases are increases in personalized employee wellness programs, new construction in the health care sector, and increased cost-shifting to private payers, according to the study.

Nearly one in four dollars spent by private payers in 2009 will be attributed to increased cost-shifting. This increase occurs because the amount of government money allocated for public medical insurance programs is not enough to cover the costs, the study reports.