This year’s results highlight three important trends in employer health program management: balancing affordability and choice, creating a culture of health, and moving from cost-shifting to future-focused strategies. The good news is that health benefits cost rose by a moderate 3.6% in 2018 and is expected to rise by about 4% again in 2019. The bad news is, that’s faster growth than in 2017, and benefits cost is still outpacing inflation and workers’ earnings growth. Prescription drugs – specialty drugs in particular – remain a top cost driver.
Smaller employers are having a tougher time controlling cost. Organizations with 10-499 employees were hit with an average increase of 5.4%, while midsize and large employers held cost growth to 3.2%. These larger employers have been making investments to address underlying issues with care delivery -- and survey results suggest it’s working. They’ve taken steps to reduce specialty drug spending and added telemedicine services, Centers of Excellence, technology-based health resources and enhanced care management. These and other future-focused strategies move away from shifting cost to employees toward improving affordability, access, and outcomes. They may take more time to reduce costs than greater employee cost-sharing, but they fundamentally change how plans manage care, how providers are reimbursed, and how people care for their own health.
Facing big cost increases, smaller employers raised PPO deductibles and added consumer-directed health plans, while midsized and large employers refined consumerism strategies.
Following five years of relatively modest cost growth, more midsized and large employers are foregoing the short-term savings offered by cost-shifting and turning to strategies addressing care delivery and health management.
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