Health Care Cost Challenges Require Employer Innovation

Controlling Healthcare Costs

Employer-sponsored health care costs remain a top priority for companies in 2017. While experts have projected that health benefit cost increases would be about 6%, same as last year, it’s not entirely comforting news for businesses.

That’s because while plan premiums seem to be rising pretty modestly, healthcare costs are still rising at more than twice the rate of inflation and general wage increases. This means employers need to consider future options such as plan designs, network changes and engagement activities to maintain affordability.

According to the National Business Group on Health (NBGH) Large Employers’ 2017 Health Plan Design survey, no big changes are in the works yet companies are just making incremental changes in plan offerings and contributions. However, they may turn their focus more specifically on pharmaceutical spending as the year progresses.

For the first time, employers reported specialty pharmacy as a top driver of health costs. Approximately one-third of employers are concerned about the high cost of specialty drugs, which treat chronic, serious or life-threatening conditions and can run in the thousands per month. In 2014, only 6% of employers rated this as a top concern. But, it’s clearly topping their list this year as 80% of respondents put specialty pharma as one of their top three highest cost drivers.

To address this area of concern, employers may implement pharmacy management techniques, including utilizing specialty tiers within their pharmacy plan designs. They will need help from multiple sources to manage these costs and will look to work with their vendor and employees to find ways to curb future pharmacy spending.

Engaging employees in all aspects of the health insurance program is paramount to controlling benefit costs. The survey found that eight out of 10 employers will offer nurse coaching for condition management and lifestyle management. And nearly nine out of 10 employers will make telehealth services available to better accommodate employees immediate healthcare needs.

Continuing to find innovative ways that optimize how care is accessed and delivered is key to controlling healthcare costs. Helping employees understand and navigate their options and costs through coaching and support tools will increase awareness around benefit offerings and deliver on value as well. It’s important for employers to offer a quality health insurance program and address current cost challenges so as to remain able to attract and retain good talent who don’t have to shoulder an excessive cost of care.

Source:  Workforce. The Mostly Ups – and Downs of Health Care Costs. March/April 2017. PP 46-47.

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