Employers in the United States are becoming increasingly concerned about the rising costs of healthcare. They worry that these costs will force them to make difficult decisions regarding employee wages.
A recent survey conducted by the National Alliance of Healthcare Purchaser Coalitions reveals that 74% of employers believe that escalating healthcare expenses will impact their ability to provide wage increases. This situation presents a significant challenge for employers who must balance competitive compensation with managing unsustainable healthcare costs.
The survey findings indicate that rising healthcare costs will likely result in employers shifting more financial burdens onto their employees. Shawn Gremminger, president and CEO of the National Alliance, emphasizes the negative consequences of unchecked cost increases, including smaller raises, job losses, and increased health inequity among working families.
Many employers are now focused on survival in this challenging economic environment, rather than just cost control.
The primary drivers of rising healthcare costs, according to the survey, are prescription drugs, high-cost claims, and hospital prices. Drug prices are seen as a significant threat to affordability by 99% of respondents, while 84% express concerns about high-cost claims, and 79% flag hospital prices as a major issue.
The average premium for fully insured plans is $8,435 for individuals and $23,968 for family coverage, with some employers reporting higher figures.
Employers are frustrated not only by rising premiums but also by external factors that complicate cost management. Geographic disparities and regulatory challenges further exacerbate the situation, with some employers feeling constrained by expensive provider networks in certain regions.
This highlights the need for innovative solutions to address healthcare costs while ensuring that employees can access necessary care without financial strain.
To manage rising healthcare costs, many employers are exploring alternative strategies. Over half of the surveyed employers are considering switching their pharmacy benefit manager (PBM) contracts within the next one to three years. The desire for transparent contracting and pricing, as well as greater control over formularies, is driving this shift.
Employers are also promoting the use of biosimilars and advocating for full and independent audit rights for PBM contracts and rebates. They want confirmation that their benefits advisers are not compensated by the PBM, directly or indirectly, to ensure transparency and align financial interests.
Employers are also taking proactive measures to address high-cost claims. Enhanced screening and early detection programs are being considered by 45% of employers to mitigate risks associated with high-cost claims. Additionally, 40% are exploring options to redirect care to alternative sites, which could potentially lower costs while maintaining quality care.
More than half of the surveyed employers are also taking steps to reduce the risk of claims related to neonatal intensive care units (NICUs) by offering new fertility benefits and managed maternity care options. This reflects a growing recognition of the importance of preventive care and early intervention in managing healthcare costs.
The challenges posed by rising healthcare costs remain a pressing concern for employers in the evolving landscape of employer-sponsored healthcare. Balancing competitive wages with escalating healthcare expenses is a complex task. The survey findings highlight the need for innovative solutions and collaborative efforts to address these challenges, ensuring the well-being of both employers and employees in an increasingly demanding economic climate.