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Employers Plan to Adopt Consumer-Focused Strategies to Reduce Health Care Costs

August 10, 2017

Two health care employer surveys released recently reveal that, faced with a five to 5.5 percent increase in health care benefit costs in 2018, United States employers plan to adopt new strategies to manage costs.

Those strategies include health care payment and delivery reform initiatives, improved patient navigation, and health engagement. These changes align with much of the work being done by hospitals and health systems to drive down health care costs and be more consumer-focused.  

As hospitals move to a delivery system based on value and outcomes, they have adopted new health care efficiencies, population health and wellness strategies, and streamlined payment models.

The Large Employers’ 2018 Health Care Strategy and Plan Design Survey conducted by the National Business Group on Health, finds that employers are looking to enhance employee experience through decision support and help navigating the health care delivery system.

The survey reveals that 66 percent of companies will offer medical decision support and second opinion services during 2018, which is an increase of 47 percent from 2017.

 For the second consecutive year, employers point to specialty pharmacy costs (26%) as the top cost driver. To help control rising  specialty pharmacy costs, 44 percent of employers will have site of care management plans in place during 2018.        

 The Wills Towers Watson 22nd annual Best Practices in Health Care Employer Survey  finds that employer confidence in offering  employee health care benefits has reached its highest level since the passage of the Affordable Care Act during 2010. Even though  there is no clear path on changes to health care coverage at the federal level, 92 percent of employers said they are “very confident”  their organization will continue to sponsor health benefits in five years.

Employers responding to the Willis Tower Watson Survey say that, during the next three years, they will work to improve patient engagement, expand the use of analytics, and efficiently manage pharmacy costs and utilization.

Both surveys shared similar findings about employer plans to reduce health care cost and risk, including:

  • Offering telemedicine services
  • Providing access to Centers of Excellence, which provide disease-based medical management of chronic-type conditions, demonstrate superior outcomes, and address patient needs from diagnosis to discharge in a coordinated manner
  • Selecting partners based upon their ability to achieve improved outcomes and hold down costs
  • Creating onsite health centers
  • Adding choice in benefit types
  • Encouraging the use of mobile applications and wearable devices to manage health care conditions and reduce health risks

The survey results indicate a decisive employer movement toward influencing how health care is delivered. Hospitals have experience in this space, as they have been making the shift from a volume-based delivery system to a value-based system. In this new world, health and wellness, chronic disease management, streamlined care, and technology-based health care are key.

As the employer models change, hospitals can be knowledgeable partners in the process. In addition, policymakers will need to continue making changes to outdated regulations and laws that governed a health care delivery system that no longer exists.

The Hospital and Healthsystem Association of Pennsylvania (HAP), is advocating for telemedicine legislation that defines the key components of telemedicine, sets licensing requirements, and requires health insurers to provide reimbursement for telemedicine services if they pay for the same service in person. HAP also is working with state and federal regulators to identify barriers to improving and streamlining care.

The Large Employers’ 2018 Health Care Strategy and Plan Design Survey was conducted between May and June 2017. A total of 148 large employers participated in the survey.

The Annual Willis Towers Watson Best Practices in Health Care Employer Survey was completed by 678 U.S. employers between June and July 2017. Results provided are based on 555 employers with at least 1,000 employees.

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