March 19, 2019
Dive Brief:
- Employers continued to see moderate health benefit cost growth of
3.6% in 2018, but projections of a 4.4% hike this year would be above the
consumer price index and employees' earnings growth, a new Mercer survey warns.
Mid-sized and large employers were more able to hold their costs down
compared to smaller employers.
- Asked their top near-term strategies for managing health plans,
"monitoring and managing high cost claims" was No. 1 for the
second straight year, followed by "creating a culture of
health."
- While controlling cost growth is an ever-present goal, employers
are also focused on a benefits package that supports a healthy workforce.
Telehealth and point solutions hyper-focused on a specific aspect of
wellness are among the perks some are offering workers.
Dive Insight:
With rising health costs a constant battle,
many employers are sidestepping payers and contracting directly with providers
to care for their workforce. Big names like Boeing and Walmart are already
doing this, and Amazon-Berkshire Hathaway-J.P. Morgan Chase's Haven venture was
created with an explicit goal of improving healthcare and reducing costs for
their 1.2 million employees.
Last week, Haven hired Sandhya Rao,
senior medical director for Partners Population Health, to lead its clinical
strategy, suggesting it may be looking to form its own provider network and
contract directly with hospitals and outpatient clinics.
While 18% of employers surveyed saw total
health plan costs rise by more than 10% last year, a third (31%) had cost
growth of 5% or less and more than a fourth (27%) saw no change at all.
Mid-sized and large employers fared the
best, with cost growth of 3.2%, while smaller employers with fewer resources
for cost management weathered "significantly higher" increases,
according to the report.
To engage employees in reining in costs,
businesses have raised PPO deductibles, provided financial incentives for
health assessments and screenings and offered account-based consumer-directed
health plans. Compared with PPOs, HSA-eligible CDHPs show more promise of
savings, with an average per employee medical plan cost of $1,357 versus
$12,486 for a PPO, the report shows.
The survey results suggest employers are
already moving to take advantage of opportunities in the market. Nearly a fifth
(18%) of respondents said they offer workers a high-performance network, while
80% offer telehealth — up 18% from 2014. More than half (56%) offer point
solutions, while 25% steer workers needing transplants to centers of
excellence. Among mid-sized and large businesses, roughly half point their
employees who need specialty drugs to specialty pharmacies, and that share
jumps to 80% of jumbo employers.
Employers are also incorporating health
into their workplace culture. About four in 10 large and mid-sized employers
said the company mission embraces a healthy workplace culture, up from 23% in
2017. To support that goal, employers are offering healthy food choices in
cafeterias and at events (63%), banning smoking on campus (57%), implementing
policies that promote work/life balance (45%) and providing onsite fitness
space (42%).
Mercer also identified 27 best practices
that businesses are using to support employee health and manage costs. Not
surprisingly, those using 14 or more had the smallest average cost increase, at
3.2%. Those using seven or fewer saw costs rise on average 5%.
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