Survey Reveals Emerging Health Benefit Cost-Saving Measures

Curbing the cost of health care and increasing its affordability remain the top priorities for almost all employers over the next three years (93%), according to the 24th annual Best Practices in Health Care Employer Survey by Willis Towers Watson.

Yet nearly two in three (63%) employers see health care affordability as the most difficult challenge to tackle over that same period. Employers expect health care cost increases of 4.9% in 2020 compared with 4.0% in 2019.

“With employers and employees seeing no end in sight, many companies are getting creative and tapping into overlooked strategies to shrink the total bill,” says Julie Stone, managing director of Willis Towers Watson’s specialty practices within its health and benefits business.

The survey revealed emerging cost-saving measures for employers.

One of the main drivers of growing affordability concerns among both employers and employees is pharmaceutical spending—notably, the increased cost and continued inflation of specialty pharmaceuticals. More employers have been adopting comprehensive solutions, including roughly half of employers evaluating and managing specialty pharmacy spend not only through the Rx benefit, but also exploring opportunities through the medical benefit.

But, Willis Towers Watson also sees two emerging strategies poised to gather momentum among employers. More employers are attempting to offset specialty pharmaceutical costs by influencing the site of care—as the location where care is given can dramatically affect prices. The number of employers that say they plan to implement coverage changes to influence site of care for specialty pharmaceuticals dispensed through the medical benefit over the next few years is more than doubling (from 21% today to 55% by 2021).

In addition, a growing set of employers are intrigued by the possibility of biosimilars offering a lower-cost option for patients in need of expensive specialty products. Thirty percent of employers have ensured they have appropriate formulary strategies to leverage biosimilars when available, with another 39% planning to take a more active approach in the next two years.

Value-based care

With employees financially strained by the cost of health care, employers see an opportunity to steer their staff toward the highest quality affordable health care.

Willis Towers Watson sees a subset of employers diving deeper into new strategies that could help improve access to care beyond the approaches of high-performance networks (growing from 16% to 52% adoption by 2021) and the use of centers of excellence within the health plans (growing from 45% to 74% by 2021), which are reaching a critical mass of employers.

In addition, by applying design features or incentives, employers are nudging their employees toward higher value, appropriate care that is sourced efficiently and away from overused, potentially wasteful services. The proportion of employers slashing out-of-pocket costs to steer employees toward proven services that produce positive health outcomes at a lower price tag will nearly triple over next few years (from 17% today to 46% by 2021). More employers are increasing the out-of-pocket costs for commonly overused and sometimes unnecessary services—adoption of this strategy stands to more than quadruple over the next few years (from 7% today to 35% by 2021).

Employers are also actively reviewing out-of-network coverage and costs. The number of companies reducing out-of-network reimbursements, eliminating non-emergency out-of-network coverage or negotiating full disclosure of all related administrative costs could more than double by 2021.

“With greater access to accurate and transparent data, employers can create value-based designs that make a smaller dent in employees’ wallets and a big impact on their health,” says Stone. “This value-based approach holds the promise of the best health results at the best price.”

Managing employee stress

As employers look to enhance their population’s wellbeing, mental and behavioral health ranked the highest as the top clinical area of focus over the next three years, selected by two in three employers. The majority of employers are working to build full-blown strategies for a holistic solution to emotional health by redesigning their employee assistance programs to better address emotional and financial wellbeing (expected to jump from 33% to 74% in three years) and building an organization-wide behavioral health action plan (leaping from 25% to 68% in three years).

The number of employers that are measuring the stress level of their employees is on track to triple by 2021, from 16% to 53%. Building on the 27% of employers that already offer apps to support sleep and relaxation, more than half (53%) will implement these programs by 2021, in order to enhance their employee emotional wellbeing. “By addressing stress and anxiety before it becomes an expensive clinical need in their population, employers are making a small financial investment to keep costs low down the road,” Willis Towers Watson says.

The survey was completed by 610 U.S. employers with at least 100 employees between June and July 2019. Respondents collectively employ 11.3 million employees and operate in all major industry sectors.