Health care: It’s a topic we can’t seem to get away from, whether it’s headlines in the news or our own personal experiences.
And it comes as little surprise that employers are also mired in this topic as they struggle to find ways to control costs, while also keeping their employees happy — a tightrope, to be sure.
According to Mercer’s latest survey, “Health Benefit Trends & Insights You Can Use in 2019,” employers are focusing on four key areas when it comes to health care: managing rising costs, affordability, quality and employee engagement.
Based on the data, it is clear that “we are all struggling with how best to manage” the rising cost of claims, especially for prescription drugs, said Tracy Watts, Mercer’s senior partner and spokesperson for the National Survey of Employer-Sponsored Health Plans.
During a webinar held Thursday, Watts asked attendees to respond to an informal poll asking if, over the next three years, their organization planned to prioritize managing costs growth or offering more attractive benefits. About half of respondents (50.6%) voted for managing cost growth. That compared to 10.7% who said offering more attractive benefits. 38.6% indicated that both options were a priority.
The good news is that health benefit cost growth in 2018 remained under 4%, hitting 3.6%. Beth Umland, Mercer’s U.S. heath and benefits director of research, noted that growth under 4% has been the trend since 2013.
However, she also pointed out that the figure appears to be inching upward again. She called out prescription drug prices — specifically, specialty drugs, which are being used more and more. Costs associated with these specialty drugs increased 11.5% per employee in 2018, the survey results indicated, pushing all pharmacy-related costs up 6%.
As to the issue of affordability, Watts noted that costs shifted to the employee were a concern as well.
“It’s become an attraction and retention issue,” she said.
As it is, employees are not all that confident that they can afford any out-of-pocket costs they might have. For those under 30, only 21% think they can afford those bills, while just 33% of those over 60 aren’t that fussed.
“Employers are aware that affordability is a concern,” Umland said.
Sander Domaszewicz, Mercer’s national practice leader for consumerism, weighed in on those concerns.
“Employee out-of-pocket costs have grown faster than plan costs,” he said. Using the survey data, he pointed out that the average PPO deductibles for individuals have “almost doubled” since 2009.
Employers are also having to gauge the quality of the health care benefits they offer.
“Better quality, we know, in the long run saves money,” Watts said.
As such, companies are increasingly moving toward offering their employees choices, rather than a one-pat plan for all. Furthermore, Domaszewicz sees a shift from more traditional plans to consumer-driven plans.
For instance, he noted that HSA plans “offer a compelling value proposition,” not just to the employer, but to the employee. Premiums tend to be lower, though deductibles are higher. But if an employer also contributes to an employee’s HSA, the employee does tend to come out ahead.
“Some employees want to keep more of their paycheck and pay more at the time of service,” he said.
Additionally, employers are also continuing to see the link between health and wellbeing. This could include programs to address the opioid crisis, something 56% of the survey’s respondents said they have done or plan to do; offering telemedicine programs, which 52% of respondents said their company participates in; or even mindfulness programs, with 48% of respondents saying their company offers.
“We are seeing a statistical broadening of well-being programs,” Domaszewicz said, especially as companies look to “develop a culture of consumerism and a culture of health.”
But even if all these issues are well-addressed, it matters little if the employees are not engaged. Often, Watts explained, the results of benefits programs can be disappointing due in large part to low employee engagement.
It could be, however, that employers now have an opportunity to help them realize their goals of managing costs, while also providing the best they can for their employees.
For instance, “embracing positive disruptions,” such as contracting with point-solution vendors, can help improve the employee experience, thereby improving engagement. Encouraging — or even requiring — employees to use “Centers of Excellence” for specialized medical treatments, such as cancer or organ transplants, can help to lower costs overall.
One thing stressed in the survey and by the webinar presenters was personalization. In order to drive employee engagement upward, companies need to turn a “fragmented and confusing” health care consumer experience into an easier-to-understand endeavor. This could mean that companies place all health care-related programs into one easy-to-access portal, making accessing and using these benefits that much more convenient to employees.
“Employers have an opportunity to shape these consumer experiences,” said Kate Brown, a senior associate at Mercer’s Center for Health Innovation.
Ultimately, the Health Insights survey confirmed what we may have already expected: Health care costs are showing little signs of slowing down, making an already difficult situation that much worse. While employers have tried to enhance their benefits programs in order to present affordable options to their employees — new and existing — the battle is far from over.
“We still have a long way to go,” concluded Watts.
About the Author
Stephanie N. Rotondo is a staff writer at WorldatWork.