- Two separate reports say rising healthcare costs in 2019 will outpace inflation. Aon's 2019 Global Medical Trend Report shows global employers could be paying 8% more in healthcare costs next year, surpassing the average general inflation rate of 3%. But a predicted 7.8% cost increase before plan changes and pharmaceutical prices is a drop from this year's increase of 8.4%, due in part to, health improvement initiatives, tighter controls on medical goods procurement, and employers' efforts to cut costs.
- According to Mercer's 2018 National Survey of Employer-Sponsored Health Plans, employers' average total health benefit cost per worker rose by 3.6% in 2018. Although the overall growth in healthcare costs was moderate, averaging 3.3% in the past five years, the global consulting firm said that increases continued to outrun inflation. Smaller employers (10-499 employees) experienced the biggest increase in costs, 5.4%, while the average growth in costs for large and midsize employers averaged 3.2%.
- Both reports highlighted employers' cost-containment efforts. Aon's report showed that employers still use traditional strategies to curb costs, such as eliminating unreasonable plan uses, altering plan designs, negotiating premium costs with carriers, and developing programs to reduce chronic medical conditions. Mercer said that more large and midsize employers are swapping short-term cost-cutting for strategies that address care delivery and health management. Mercer also noted that employers continue to add telemedicine services as well as provide medical opinion services, support programs targeting chronic health problems, and access to centers of excellence (COE) for surgeries and a growing range of other complex treatments.
Benefits experts generally agree that employers are getting more involved in healthcare and becoming more proactive about addressing cost and quality. "Employers are very aware of the burden that high healthcare costs places on employees," Sharon Cunninghis, head of Mercer's U.S. health business, said in a statement. "We're helping them implement cost-saving strategies that don’t shift expense to employees and can actually improve affordability, access and outcomes — like better clinical management of specialty drugs, preventing and properly treating opioid addiction, and steering individuals to high-quality, cost-effective providers."
Employer frustration with healthcare costs prompted many, especially larger companies, to find and adopt cost-containment strategies. Nearly half of respondents in a recent National Business Group on Health poll said they're being more active about changing healthcare experiences by experimenting with new delivery and payment methods like accountable care organizations (ACOs), COEs and performance networks.
Creating a "culture of health," an environment that supports workers' health and wellbeing through engagement, may be a necessary goal if employers want to keep cost increases stable. Indeed, Mercer said creating a culture of health was the second most important cost-containment strategy for employers surveyed, behind "managing high cost claims."