It is a story as old as time: health costs increase faster than inflation and employers struggle to manage them as they eat a larger and greater part of their budgets.
Health costs are expected to increase by almost 8% by 2025, according to a report by the Business Group on Health, contributing to an increase of more than 50% since 2017.
“We are now experiencing the highest year -on -year increase in more than a decade,” said Jim Winkler, strategy director of the Health Business Group, in an email. “Entrepreneurs have absorbed most cost increases over the last four years and may not be able to continue.”
Pharmacy expenses are mainly responsible for the recent increases in health costs. From 2021 to 2023, the average percentage of health care expenses in pharmacy went from 21% to 27%, according to the Health Business Group. As a result, 3 out of 4 entrepreneurs say they are “very concerned” with the total cost of the pharmacy, according to the report.
In addition, more people use GLP-1 weight loss drugs, including Ozempic, Wegovy, Zepbound and Mounjaro, to treat diabetes, obesity and other conditions.
However, although medicines are clinically effective, they are expensive with a price of about $ 700 to $ 800 a month. More than 2 out of 5 adults under the age of 65 with private insurance (about 57.4 million people) can be eligible for GLP-1, which could speed up health spending.
“GLP-1 is one of the main contributors to the cost of pharmacy in general, especially as the use extends to medical conditions beyond diabetes and weight management,” said Winkler.
The highest rates of chronic conditions, including cancer, cardiovascular conditions, diabetes and mental health, also contribute significantly to increasing health costs for employers. Although most of these costs are attributable to an aged template, the initial diagnoses of cancer have grown more severe among young people who differed or delayed care during Covid-19 pandemic, said Winkler.
The consolidation and reduction of competition between healthcare suppliers also contribute to the increase in costs, especially for hospital care.
These are six key strategies that employers can use to manage health costs by 2025.
1. To make responsibilities to the vendors of the clinical results and the financial results.
More than 8 out of ten entrepreneurs are implementing or strongly considering the application for the proposal application to achieve better prices of the sellers, according to the business group on health.
Entrepreneurs should rigorously evaluate the ROI associated with sellers’ solutions, using shared performance metrics that meet the organization’s clinical and financial goals, and replace less performance members as needed, said Winkler.
However, demonstrating the ROI for “Wellness or other cost containment measures can be difficult,” said Jennifer Chang, a knowledge advisor to the HR HR of Human Resources Management.
2. Enter the programs that fit the value -based care models, including network providers that promote high quality profitable results.
Using centers of excellence – Select suppliers that offer specialized medical care that complies with specific and quality costs, can help reduce behavioral health costs and other services, according to Chang and Winkler.
High performance network models that promote the most profitable care through a greater collaboration and a payment -based payment, as well as advanced primary care programs that link the refund to the management of specific chronic conditions, such as diabetes, can also help entrepreneurs reduce healthcare spending, Chang and Winkler.
3. It adopts new strategies for managing pharmacy costs.
Alternative pharmacy management programs that are more transparent, less confident in sales and encourage the use of biosimilars can help entrepreneurs increase pharmacy costs, said Winkler.
“The pharmacy is actually several programs that must be completely integrated from a user experience and the data sharing perspective,” said Winkler.
Entrepreneurs do not need to use the same seller for all their pharmacy needs, which offers additional opportunities to save costs. Entrepreneurs must also combine GLP-1 access with nutritional advice, diabetes management and other condition management approaches to maximize the advantages of these new weight management medicines.
4. Help employees sailing the health delivery system.
According to experts, care sailors, employee training and other resources can help employees access and use the highest quality and the most profitable quality. Explaining the mechanisms of costs, such as cups and deductible, employees will allow them to “use their wise health benefits,” said Chang.
5. Build work centers for the workplace.
An increasing number of organizations invest in primary care clinics sponsored by employer who offer employees without low cost or low cost services or near jobs because they have “ been running on a brick wall ”, trying to reduce costs through the traditional health delivery system, said Megan Colleen Mchugh, a healthcare service researcher and a professor at the Medicine School of Medicine of the North Orordwester. University.
WHCs can increase the use of preventive medical services, improve chronic care management and improve quality of life, according to a new MCHUGH co -author. The article, which evaluated the findings of 10 previous studies, found that the WHC offered annual costs saving between $ 35,000 and $ 2.1 million and ROI, from $ 1.09 to $ 15.88.
However, the WHC “only work if you are a big entrepreneur” because they have high fixed costs, and there is very little evidence of the quality of the care they offer, said MCHUGH.
6. Take advantage of data analytics to determine which cost management strategies make more sense.
Entrepreneurs need to evaluate the performance of sellers, clinical conditions, network use and geographical access limitations to determine the best focus to reduce health costs, according to experts.
Analysis of claim data, for example, can help entrepreneurs identify what promotes their health expenditure and “target interventions for high -cost areas,” said Chang.
Entrepreneurs must avoid employers
However, in their search to reduce health costs, entrepreneurs must avoid strategies that may cause employee dissatisfaction, a small commitment or unwanted consequences, Chang said. Entrepreneurs must consider their organizational culture, including their “disruptive change tolerance,” said Winkler.
Excessive costs of employees, for example, can harm the morality and retention of employees, while also cutting out benefits without excellent communication and support can “cause a decline”, as employees can perceive cost measures increased as a reduction in total compensation, said Chang.
He said that cost containment measures can also create capital problems if they are disproportionately affecting lower income employees, added that health plans that adapt to the size they do not consider demographic or the needs of the labor force may lead to less adoption and dissatisfaction of employees.
In addition, the adoption of new plans or welfare initiatives can “pull human resources and require significant coordination,” said Chang.
Entrepreneurs can manage these challenges effectively through the involvement of employees early, providing transparent and coherent communication and deploying changes gradually, said Chang. They must also supervise and adjust the measures of cost based on the feedback data and use of employees, as well as ensure the changes in costs and well -being programs are inclusive and equitable, he said.
In addition, the creation of a workplace that supports the physical, mental and emotional well -being of employees through healthy cafeteria options, fitness in situ facilities and other measures can help to “ promote a culture of health ”, said Chang, which helped reduce sanitary costs waters waters waters waters waters waters waters waters waters waters waters waters waters waters waters waters waters waters waters waters waters waters.
