Employers Manage to Cap Increase in Health Care Costs at 2.6%

The 2017 Mercer National Survey of Employer-Sponsored Health Plans found that employers have been able to contain the rise in health care costs this year to 2.6%, essentially on par with the 2.4% increase in 2016.

Between 2013 and 2017, the rise in health care costs has averaged 3.3%, and between 2007 and 2013, it averaged 6.2%, Mercer says.

Mercer notes that employers were able to contain these costs without enrolling more employees into high-deductible plans. They have achieved this by offering such things as a “transparency tool,” an online resource to help people compare the prices of different healthcare providers.

Telemedicine services, whereby someone can speak with a health care professional via the telephone, televideo or web portal, average $50 a visit, compared to the $125 a typical office visit costs, Mercer says. In 2017, 71% of employers with 500 or more employees offered some form of telemedicine to their employee base, up considerably from 59% in 2016.

Another method by which employers have been able to contain costs for drugs is by steering employees to a specialty pharmacy that can instruct them on how to administer the drugs at home rather than in a hospital or doctor’s office. Specialty pharmacies also use what is known as “step therapy,” whereby a patient is started off on a less expensive drug.

“The high cost of health care poses major challenges to employers and their employees,” says Sharon Cunninghis, the leader of Mercer’s U.S. health business. “We’re helping employers gain ground on some of their biggest cost drivers by such means as addressing chronic conditions with enhanced care management and targeting double-digit spending growth on specialty drugs with a suite of pharmacy solutions.”

Mercer’s report is based on a survey of 2,481 employers in both the public and private sectors. Mercer says it will publish the full report on the survey this coming March.