Managing high-cost claims tops employer benefit plan concerns
- 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.
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%.