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s Concerned about Affordability of Health Care

Employers Concerned about Affordability of Health Care

Sept. 20, 2022
In addition to those concerns, employers face issues such as long COVID mental health and health equity.

The recently reported, 2023 Large Employers’ Health Care Strategy and Plan Design Survey, released by the Business Group on Health,  surveyed 135 large employers that covered more than 18 million people. Respondents were contacted between May 31, 2022, and July 13, 2022. 

Here are some of the key findings:

 Affordability of health care and medications is top of mind.

Affordability remains a top concern for employers. It is one they haven’t been as successful in addressing via remediation and negotiation efforts when compared to other areas of patient engagement, including experience, access and quality. Employers will continue to assert market influence in addressing affordability with their partners. However, they are also keenly focused on policy efforts regarding affordability. For this reason, lowering health care costs and prescription drug expenses and making more affordable coverage possible are among employers’ top future health care reform priorities (Figure 15). Employers are particularly concerned about both the affordability of maintenance medications and newer gene therapies. A majority of employers believe that both market- and government-based interventions are the solution to escalating prescription drug costs. Affordability of mental health services ranks among the top areas of focus for 24% of employers, with many looking to low- to no-cost virtual health as the answer.

Employers reevaluate fundamentals as prescription drug cost pressures continue.

Ninety-nine percent of employers say prescription drug costs are concerning. Specialty pharmacy trends continue at an alarming rate, and the pipeline is robust with new, costly treatments. In 2021, prescription drugs accounted for (a median of) 21% of employers’ health care costs. Further, employers noted that specialty medication spend drove 12% of health care costs, meaning that over half of employers’ pharmacy expenses were for specialty. While many employers have long focused on mitigation measures within their pharmacy benefit manager (PBM) programs, a growing number are also focused on prescription drug spending within their medical plans, where a median of 20% of pharmacy claims are adjudicated.

The time to assess and improve virtual health has come.

 Virtual health has permeated many aspects of employer health and well-being offerings. In fact, 74% believe that virtual health will have a significant impact on how care is delivered in the future. Yet virtual health is approaching a critical crossroads. To have influence on the quality of care, 84% of employers believe that integrating virtual health and in-person care delivery is essential and the most important action their partners can take. Otherwise, the virtual health experience may lead to duplication of services, unnecessary care, wasteful spending and a fragmented care experience. Despite existing integration challenges, employers believe virtual health holds promise. This is evidenced by the anticipated growth of virtual primary care offerings, increasing from 32% in 2022 to 69% in 2025, and plans by 57% of employers to add even more virtual health solutions in 2023. In sum, virtual health is here to stay, but improvements in quality, integration and marketplace rationalization are needed before it can realize its full potential.

Long-term impacts of COVID-19 are becoming apparent, with others anticipated in the coming years.

 Long-term mental health issues are the top impact resulting from the pandemic, both observed and anticipated. Increases in medical services due to delayed care is a close second - 43% are already seeing this and another 39% anticipate that these increases will occur. Twenty-one percent have witnessed increased disability claims due to long COVID, and 24% expect to see an increase at some point. While an increase in late-stage cancers has been observed by just 13% of employers, 44% expect to see these increases in the near term. Knowing that these impacts are happening now and are expected to continue, employers are keeping many pandemic-related health and well-being offerings in place for the foreseeable future. Ninety-four percent will continue offering expanded telehealth and virtual health, and 85% will do so for mental health.

 Dramatic increase in the importance of health and wellbeing to workforce strategy due to many factors.

 While COVID-19 emphasized the importance of the role of health and well-being in the workplace, the rising number of employers asserting that their health and wellbeing strategy plays an integral role in workforce strategy—increasing from 42% to 65%—is the culmination of many factors that have been building for several years. These include the need to attract and retain talent through benefits and offerings, as well as supporting employees’ overall health and well-being and its impact on business performance and culture.

 Health equity remains a concern for most employers.

 Health equity continues to be on the minds of employers; in fact, three in four employers share concerns about inequities in their company’s health and well-being initiatives. Employers are also setting their sights on 2024 and 2025 to have an impact on social determinants of health, especially racism, childcare, transportation and food access/insecurity. Health care and finances/income will be addressed by 80% and 75% of employers, respectively, by 2023. In 2023, employers will address health inequities in a multitude of ways, including by offering or expanding coverage of transgender health care benefits (82%) and by expanding benefits to support a neurodiverse population (78%). Reproductive health continues to be an aspect of health equity employers are actively addressing. Over the next 2 years, employers are doubling down on their efforts to improve access and quality of reproductive care, including expanding fertility benefits to cover all types of families and promoting/covering group-based prenatal care and doula services. All in all, 85% of large employers will implement at least one tactic to address inequities in women’s and reproductive health. While the survey was in the field, the Supreme Court issued its decision to overturn Roe v. Wade. Forty-four percent of employers have made changes to improve access to abortions or are planning to do so. The most cited change was providing financial assistance for travel and accommodations to receive services.

About the Author

EHS Today Staff

EHS Today's editorial staff includes:

Dave Blanchard, Editor-in-Chief: During his career Dave has led the editorial management of many of Endeavor Business Media's best-known brands, including IndustryWeekEHS Today, Material Handling & LogisticsLogistics Today, Supply Chain Technology News, and Business Finance. In addition, he serves as senior content director of the annual Safety Leadership Conference. With over 30 years of B2B media experience, Dave literally wrote the book on supply chain management, Supply Chain Management Best Practices (John Wiley & Sons, 2021), which has been translated into several languages and is currently in its third edition. He is a frequent speaker and moderator at major trade shows and conferences, and has won numerous awards for writing and editing. He is a voting member of the jury of the Logistics Hall of Fame, and is a graduate of Northern Illinois University.

Adrienne Selko, Senior Editor: In addition to her roles with EHS Today and the Safety Leadership Conference, Adrienne is also a senior editor at IndustryWeek and has written about many topics, with her current focus on workforce development strategies. She is also a senior editor at Material Handling & Logistics. Previously she was in corporate communications at a medical manufacturing company as well as a large regional bank. She is the author of Do I Have to Wear Garlic Around My Neck?, which made the Cleveland Plain Dealer's best sellers list.

Nicole Stempak, Managing Editor:  Nicole Stempak is managing editor of EHS Today and conference content manager of the Safety Leadership Conference.

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