A webinar highlighting how employers balance rising healthcare costs with employee healthcare needs produced a variety of insights from panelists. Sponsored by Personify Health, a leader in personalized health platforms, the webinar drew attention to perspectives from a CFO, a former CHRO, chief medical officer and a health benefits research director. Additionally, webinar listeners participated in three different polls that revealed striking differences in how they think about healthcare costs, such as health and benefit cost drivers and the percentage increase in healthcare costs across their companies and organizations.
Here are some of the takeaways from the conversation moderated by Personify Health Chief Marketing Officer Erica Sniad Morgenstern.
Experts differ on what is driving up healthcare costs
Paul Fronstin, Employee Benefit Research Institute (EBRI) Director of Health Benefits Research, said drug prices account for only a small portion of overall healthcare cost increases.
“We’re not seeing a shift from inpatient to outpatient spending to drug spending. Everything is going up and it’s all going up in the same proportion. And for about the last 10 years or so, inpatient care has been running about a third of what we spend on healthcare. Outpatient is just below 30% and prescription drugs are running at about 10%.”
Personify Health Chief Medical Officer Dr. Jeff Jacques noted that macro trends such as population levels and hospital consolidation are collectively driving healthcare costs.
GLP-1 drugs play a role in how employers manage healthcare costs
Jacques made a note of the increasingly prevalent trend of GLP-1 drugs in the context of healthcare benefits. Though geared for people with Type 2 diabetes, they have also been prescribed for those who need to lose weight, which could make it easier to manage and even prevent some chronic conditions that can drive up healthcare costs.
“I can’t have a conversation with an employer or prospective client in the last year where GLP-1s have not come up specifically and repeatedly in conversation. And I don’t love the quote, but it’s a quote that I’ve heard now replicated from a few CHROs that GLP-1s are the first compound that’s specifically come up over and over again in C-suite level conversation on a regular basis.”
Balance incentives with costs and consequences for employees as they make healthcare decisions
Scott Peterson of Scott Peterson Executive Advisor LLC specializes in executive coaching, advising companies on succession, culture, and executive compensation. He noted that to motivate employees to make important healthcare decisions, it is incumbent upon employers to incentivize them.
“Humans are emotional creatures and when it comes to messing with their healthcare plan, there’s always going to be a tendency to wonder what is the company trying to do? So how you create incentives and a healthy push to get people to consider options is important, but because inertia is a hard thing to change, you’ve got to marry it up with costs, consequences, and implications. [They] may not be easy, but [they] can help get employees to more seriously consider making changes to the plan they’re electing or participating in these programs.”
Employers need to improve health literacy among staff and the ways they communicate healthcare benefits
Fronstin, Peterson, and Duncan Welstead, Redox CFO, agreed that employers tend to share one weakness when it comes to healthcare benefits – the way they are presented to employees.
“I think you have to tackle health literacy both from the point of view of choosing the right health plan and choosing the right healthcare service,” Fronstin noted. “I’ve been to some really bad open enrollment meetings [at] employers where something new was rolled out, maybe an HSA (Health Savings Account) and people didn’t know what to even ask because the presentation was so bad.”
Harness the power of analytics tools
One way employers are addressing escalating healthcare costs is by using analytics tools to provide insights to identify how expenses can be reduced. Panelists shared some examples of how they’re doing that, including Jacques.
“We increasingly are using a mixture of algorithms to screen through claims, look specifically for trends in those claims and high-cost items. We also combine that with a manual review of charts by clinicians to make sure that the appropriate things are being done and that there are no inappropriate claims being pushed through.”
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