Employers clamp down on rising healthcare benefit costs
Healthcare benefit costs in the U.S. are expected to rise 5% next year, causing large employers to up their efforts to save, according to a survey from the National Business Group on Health.
To keep costs lower, more than half––51%––of large employers in the survey said they were implementing more virtual care solutions, while 39% were focused on strategies on the highest cost claims. Along with those top two initiatives for 2020, employers were looking at ways to manage prescription drug benefit costs, the survey found.
The findings come after healthcare benefit costs also rose 5% in 2019, though the actual increase in costs in 2018 was 3.6% to large employers. Those costs reached $14,642 per employee in 2019, including premiums and out-of-pocket costs for employees and dependents. In 2020, that amount is expected to jump to $15,375, with employers covering about 70% of costs and employees bearing 30%.
With costs rising, virtual care is being touted as a cost-cutting solution, with 64% of employers believing it will play a significant role in how healthcare is delivered in 2020. Of employers that are implementing virtual care offerings, nearly all will offer telehealth for minor, acute services, and 82% said they will offer virtual mental health services.
“Virtual care solutions bring health care to the consumer rather than the consumer to health care,” Brian Marcotte, president and CEO of the National Business Group on Health, said in the survey. “They continue to gain momentum as employers seek different ways to deliver cost effective, quality health care while improving access and the consumer experience.”
Still, there are numerous challenges for employers to deliver real cost-saving measures on healthcare benefits.
“One of the challenges employers face in managing their healthcare costs is that healthcare is delivered locally, and change is not scalable,” Marcotte said. “It’s a market-by-market effort. Employers are turning to market-specific solutions to drive meaningful changes in the health care delivery system.”
In addition to telehealth, employers are focused on reducing pharmacy costs, with particular concern around new, costly therapies. In 2020, 20% of employers will have a point of sale rebate program, but that could jump to 60% in 2022, the survey found.
Even as companies bear more costs for their employees’ healthcare, many are hesitant to accept Medicare-for-all policies. A whopping 81% believe Medicare for all will increase taxes, but 72% say it will lower the uninsured rate. In addition, 57% believe such a plan will increase healthcare costs and 47% predict higher employee costs.
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."