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Large Employer Health Benefit Survey

By August 10, 2018Commentary

The National Business Group on Health is largely comprised of big employers and helps them formulate policy to improve their health benefits.  A recent survey by the group shows what is on their members’ minds heading into 2019.   (NBGH Release)   The reason for the group’s members’ concerns is evident in the ongoing increases in the cost of providing health benefits.  The survey respondents expect that average total costs for insuring an employee plus dependents in 2018 will be $14,099 and that this sum will rise to $14800 in 2019.  Employers expect to cover 70% of that total cost, so workers get to pick up the remaining 30% via premium contributions and cost-sharing.  $5000 is a lot of money for the average employee.  Particular sources of the increasing spending include specialty pharmacy and certain diseases like cancer.  Interestingly, these large employers say they are moving away from cost-sharing as the primary method of controlling the hit to their bottom lines.  In 2018 39% of the respondents offered only a high-deductible plan, but in 2019 this number will drop to 30%.  This may be partly driven by the shortage of workers and need to compete for good employees by having better health benefits.

Employers are more interested in intervening in care delivery as a tactic to control spending.  Nearly half mentioned this a top priority among cost control approaches.  35% said they are implementing new delivery methods like use of accountable care organizations or high performance networks.  11% say they will have some direct contracts with health systems or providers in 2019, up from only 3% this year.  Centers of excellence contracting will rise from 12% to 18%, with cancer, cardiovascular and fertility being a particular focus.  Most employers also are expanding use of telemedicine.  70% said they hope there are new entrants in the health plan market that will create more innovation and lower costs.  Frustration was also evident with the manner in which pharmaceuticals are delivered and paid for.  14% of respondents said the supply chain needs to be more transparent, 35% said rebates should be reduced and half said the supply chain is too complex and inefficient.   75% said rebates are not an effective tool to drive down costs (which is weird because they supported them initially and benefited from them) and 90% said they would consider a different approach.  Most also want existing rebates to be applied at the point-of-sale, so that consumers benefit through reduced cost-sharing.  Most believe the consolidation occurring in health care will not be beneficial.  Glad these companies are so concerned about improving health care and health benefits but a lot of the things they supported in the past are creating the problems of today.

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