Of all the drivers pushing up healthcare costs, spending on prescription drugs is one of the most significant.
As a result, it is rising to the top of the agenda for many self-insured employers and the benefits consultants who guide their decision-making.
Three in five consultants, or 61%, said they are spending more time this year advising clients on the costs of prescription drugs, according to the findings of the 2024 Benefit Consultant Sentiment Index. To download the report, click here.
Now in its second year, the Index is based on a survey of more than 100 seasoned healthcare benefits consultants who offer guidance to a cross-section of employer sizes. The Index, published by MedCity News and sponsored by Quantum Health, has become a ‘reference’ barometer for consultants in the industry.
The survey captures some of the changes in the way healthcare benefit consultants advise self-insured employers. In addition to recommendations around prescription spending, the survey tracked evolving views on the role of artificial intelligence, the growing interest in GLP-1 medications like Ozempic and Wegovy, navigation, and fatigue over the volume of niche benefit solutions available to employers.
Spending on medication is on the rise, particularly with the spreading usage of GLP-1s, drugs originally developed for people with diabetes that have proven relatively effective at reducing weight. But despite the popularity of the drugs, less than one in three consultants, or 31%, are recommending expanded coverage. Nearly half, or 47%, are recommending both increases and decreases in coverage, depending on the client.
Paul Fronstin, director of health benefits research for the Employee Benefit Research Institute (EBRI), talked about the complex questions the drug raises for employers in a phone interview.
“It’s still a brand-new medication, and employers are going to have to figure out how they’re going to proceed,” Fronstin said. Employers, for example, may want to attach conditions before approving coverage for plan members using the drugs to lose weight.
Employers also want to see what other employers are doing about the popular medications. “Most trends take off like an airplane, not like the space shuttle,” Fronstin said. “It could take years before you get to cruising altitude with some of these.”
Harrison Newman, Corporate Synergies Vice President, said in a phone interview that GLP-1 drugs are the source of a lot of interest among employers, but he acknowledged that he simply offers the pros and cons of the drugs, rather than advising them one way or the other, so employers can make more informed choices.
“There are two aspects to companies deciding whether to offer GLP-1 drugs. One aspect is financial and the other is cultural. Are you an organization in a competitive space where, if you don’t offer this, people are going to leave to get it and it will affect the culture of the organization? There’s also a financial standpoint,” Newman said. “These are expensive drugs. What are the long-term benefits of people taking these drugs? Will it cause a drop in obesity? A drop in [Type 2] diabetes leading to a drop in healthcare costs? We’ve seen companies take the approach of offering [GLP-1 drugs] but others say it isn’t a long-term solution, especially if people are regaining the weight or they can’t cope with the drugs’ side effects. But even companies offering it [in their healthcare benefits] aren’t advertising it.”
When it comes to another trend – the integration of artificial intelligence in healthcare – benefits consultants are counseling clients in a number of areas, according to The Index. The most common are: facilitating personalized decision support to help employees make better benefits decisions (50%); reducing administrative burdens (49%); and predictive analytics for cost optimization and disease management (43%).
“The adoption of AI in tandem with the utilization of other technologies such as cloud computing, data modernization and analytics, and the Internet of Things can not only consolidate healthcare processes and patient data but also transform the approach to patient care, making it more personalized, accessible and efficient,” said Tina Wheeler, vice chair and healthcare sector leader for professional services firm Deloitte LLP, in response to emailed questions.
Generative AI, in particular, could help address challenges such as workforce shortages and burnout, Wheeler said. The technology is already playing a role in billing, payment, prior authorization, fraud detection and other areas.
“Interest and adoption have grown so rapidly, it is only a matter of time until it is much more pervasive throughout the industry,” Wheeler said. “We are already seeing organizations setting up new organizational structures and roles, including chief AI officers.”
AI is also cropping up in the various benefit solutions available to self-insured employers, making it even harder for them to shift through their options.
Employers already have been looking to trim down the solutions they offer employees, Fronstin said. “Having more point solutions with AI just makes it even more complicated.”
Indeed, 84% of consultants say their clients have “point solution fatigue,” according to The Index. And nearly two in three consultants, or 63%, say their clients want to consolidate the solutions under a single healthcare navigation solution.
Nearly half of respondents, 46%, say their clients are considering consolidation through an independent provider, making it the top choice, according to The Index. Insurer-operated navigators came in at 38%.
Seeing independent navigators at the top came as a “pleasant surprise” to Wheeler.
“We’re not seeing explosive growth in these companies and their market penetration recently but could see this point solution fatigue becoming a tipping point for them,” Wheeler said. “The consumers who use these navigation platforms tend to really like them.”
One area where navigation tools are coming into play is cancer care. According to The Index, 41% of consultants see care-navigation tools and services as a best practice for employers looking to support employees with the disease. Other best practices include screening for early detection (67%); employer flexibility around work (49%): cancer centers of excellence (47%); and behavioral health counseling (43%).
The growing interest in preventive care is also a notable finding of the survey. For the first time, the area is getting more attention than chronic condition management, which was identified as the most common recommendation by 39% of consultants this year. Last year, chronic condition management was recommended by 46%, with preventive care at 29%.
More than two in five consultants or 42%, said preventive care programs are what they recommend most often to clients concerned about benefits cost management, according to the Index.
“By focusing more on health maintenance and disease prevention, we can try to lessen the occurrence and severity of these illnesses, thereby reducing health care expenses,” said Wheeler. “This shift towards preventive care is a proactive strategy that enhances quality of life and sustainability in the health care system, necessitating collaboration among providers, insurers, and policymakers.”
Prevention is good, said Fronstin. However, it is more likely to impact future costs than current costs, 80% of which typically come from 20% of an employer’s population.
“If you don’t focus on them, it kind of doesn’t matter what else you do,” he said.
To download the 2024 Benefit Consultant Sentiment Index report, please fill out the form:
