Saturday, November 16, 2019

Current State of Health Benefit Strategies

According to the Willis Towers Watson 23rd Annual Best Practices in Health Care Employer Survey, employers have identified priorities that will improve health outcomes and the health experience for employees. (Unless otherwise noted, all stats cited in this blog are from the Willis Towers Watson survey.) Over the next three years, employers’ top priorities include:

  1. Clinical conditions: Improving the health of employees and reducing the costs for key clinical areas
  2. Employee wellbeing: Enhancing employees’ physical, emotional, financial, and social wellbeing
  3. Employee experience: Promoting employee involvement in workplace, technological, and physical environments
  4. Healthy workplace: Creating a workplace environment that encourages healthy living

Clinical Conditions

Employers report that the following clinical conditions are their top concerns:

  1. Metabolic syndrome/diabetes
  2. Musculoskeletal disease
  3. Mental/behavioral health
  4. Cardiovascular disease
  5. Cancer
  6. Maternity/infertility


Well-being is a significant focus, concentrating on physical, financial, and mental well-being. Over the next three years, 82% of employers are investing in well-being initiatives.

Top Performers

The survey isolates the best performing companies (48 of them) that have both costs and trends lower than the national average.

  • Best performers are estimated to pay $1,393 PEPY less than the average employer ($11,219 in 2018 compared with the national average of $12,612).
  • For perspective, a best performer with 10,000 employees is saving almost $14 million a year over similar size peers.
Depiction of top performers healthcare costs

Cost Increases

Healthcare costs continue to increase at a lower rate than ten years ago or so, but the increases are still above inflation. So even though the increases aren’t near double digits, they are not palatable.

graphic shows that drug costs really peaked in 2014 and 2015
A Kaiser Family Foundation graphic shows that drug costs really peaked in 2014 and 2015, but have dropped considerably since then.

graph of annual growth rate of national retail prescription drug spending
The large bump in drug costs during 2015 and 2016 was influenced by the Hepatitis C curative drugs as seen below in a graph from Kaiser Family Foundation.

graph of annual per capita growth rate of retail drug spending in large employer plans

Data analytics is also a best practice, as it is needed to effectively measure any programs or changes that are implemented. Data analytics can also determine the financial impact of making these changes, allowing employers to dip their toe in the water before jumping in.

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