- A majority of large employers plan to roll out more virtual care options next year as one way to curtail health costs, according to a report released Tuesday from the National Business Group on Health.
- The total cost of healthcare benefits is expected to increase by 5% in 2020, in line with 2019. The estimated cost per employee is estimated to rise from $14,262 to $15,375, according to the report.
- Of the 147 large employers participating in the survey, 39% said they planned to implement a more focused strategy on high cost claims next year. Some 85% identified high-cost drugs as one of their top pharmacy related concerns.
The U.S. still spends twice as much as other high-income countries on healthcare, driven largely by labor and administrative costs. Such spending is expecting to continue to increase and could represent 20% of the economy by 2026.
Large employers are on the hook for much of this and are perpetually on the hunt for methods of tamping down the price tag. A recent survey from Mercer found health benefit costs for employers projected to rise 4.4% this year, above the consumer price index and employees' earnings growth. That poll also showed an interest in telehealth to cut costs.
Bringing down spending on employee healthcare was the impetus for the creation of Haven, the joint venture from Amazon, JPMorgan Chase and Berkshire Hathaway. The company hasn't taken many public actions yet this year, however.
To get a handle on ever-rising health benefit costs, big employers plan to double down on especially high-cost claims, limit drug costs and roll out more virtual care solutions, the annual NGBH report found.
Employers will cover almost 70% of health benefit costs while employees will be responsible for about 30%, or nearly $4,500.
Musculoskeletal issues were cited frequently as a top condition affecting costs, with 44% of employers ranking it as the top condition and 85% ranking it among the top three. Cancer also ranked high, with 25% of employers ranking it as the top condition.
And employers are also planning to ramp up their virtual mental health services, with 82% offering such care. That percentage could increase to 95% by 2022, according to the study.
"Virtual care solutions bring healthcare to the consumer rather than the consumer to healthcare. They continue to gain momentum as employers seek different ways to deliver cost effective, quality health care while improving access and the consumer experience," Brian Marcotte, president and CEO of the National Business Group on Health, said.
And the number of employers predicting virtual care will play a significant role in future healthcare delivery is increasing, with 64% suggesting it will be significant in 2020, compared to 52% calling it significant in 2019. Almost all employers plan to offer telehealth services for minor, acute services.
Pharmacy benefit cost management was also a significant worry for employers, with managing the high cost of specialty drugs and therapies a top concern. The survey found 85% of respondents rate high-cost drugs as the among the top two most concerning pharmacy issues.
"Employers are very concerned about how to finance the high cost of new million-dollar drug therapies. Some of these therapies will cost more than what an employee will earn in a lifetime," Marcotte said.
Employers are also picking up on the trend of delivering advanced primary care through an onsite or nearby health center, with 34% using that delivery model. Nearly half of respondents plan to pursue an advanced primary care strategy in 2020, and another 26% are considering using one by 2022.
The survey found employers are also using alternative payment and delivery models such as accountable care organizations and high-performance networks. About a third of employers say they plan to use either or both strategies, either directly or through their health plan, and that percentage could nearly double to 60% by 2022, according to the study.
Meanwhile, employer interest in offering consumer-directed health plans may be waning, the survey found.