Large employers expect health benefits costs to increase 5% in 2018 and cost $14,156 per employee — a rise that is pushing companies to look at ways to rein in costs.

It will be the fifth consecutive year of 5% increases, according to the National Business Group on Health’s Large Employers’ 2018 Health Care Strategy and Plan Design Survey, released Tuesday. Of the predicted total cost for 2018, employers will cover almost 70%, while employees will be responsible for 30%. With the expected hike, employers are setting their sights on a robust set of services — from telehealth to on-site health clinics — to help curb rising costs.

“We’re seeing an increased focus on the consumer experience within the healthcare system,” says Brian Marcotte, NBGH’s CEO. “Employers have come to the conclusion that as much as [they’d] like for employees to be sophisticated consumers of healthcare, the system is way too complex, way too fragmented and they don’t touch it with enough frequency to ever be sophisticated consumers.”

Brian Marcotte, National Business Group on Health CEO
Brian Marcotte, National Business Group on Health CEO Nick Otto

He says that realization, combined with information from the new report, is leading employers to look at catered services to help employees understand benefits, understand their treatment options and to know where to go for care.

According to the survey, 66% of companies will offer medical decision support and second opinion services in 2018, an increase of 47% from this year. Additionally, the number of companies offering high-touch concierge services will jump from 28% this year to 36% in 2018.

Offerings of e-health services continue to grow. Virtually all employers (96%) will make telehealth services available in states where it is allowed next year, according to the study. Further, more than half (56%) plan to offer telehealth for behavioral health services, more than double the percentage this year.

Utilization of these programs also is growing, with NBGH reporting nearly 20% of employers experiencing employee utilization rates of 8% or higher.

An Rx for savings

For the second year in a row, specialty pharma continues to be the biggest driver of healthcare costs for employers.

“Managing these high cost drugs is a top priority for employers next year,” Marcotte says. To help control these spiking specialty pharmacy costs, 44% of employers say they will have site of care management tactics — ensuring medications aren’t administered at more costly settings —in place next year, a 47% increase over this year. Additionally, seven in 10 employers will use more aggressive utilization management protocols.

The NBGH study dovetails alongside another survey from Willis Towers Watson released recently, which also found employers are increasingly spending more on healthcare benefits.

The WTW study found that despite the uncertainty about the future of healthcare legislation, employer confidence in offering employee healthcare benefits has reached its highest level since the passage of the Affordable Care Act in 2010. Ninety-two percent of employers said they are “very confident” their organization will continue to sponsor health benefits in five years.

“Employers understand that there is no single strategy for success when it comes to healthcare, and it is critical to engage employees through education and communication that will create a win/win,” says Catherine O’Neill, a senior healthcare consultant at Willis Towers Watson. “The most effective health programs will include a broad range of strategies that encompass employee and dependent participation, program design and subsidy levels, and plan efficiency. The ultimate goal is to offer a high-value plan that manages costs for both employers and employees while also improving health outcomes.”

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