Employee Healthcare Cost-shifting is So Last Year
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Every year, employers make changes to bring down the rising cost of their health plans. This year, our Survey shows the smallest-ever difference between expected underlying medical plan cost trend (5.3%) and expected after-changes cost trend (4.1%). What’s happening? With the underlying cost trend slowing, employers are being much more “future-focused” on cost control. That’s a critical move from hard-dollar cost shifting to targeted behavior change.
Fewer than half of employers are changing cost-sharing features, the standard way to hit next year’s budget. They may be changing them less dramatically, too. By 2018, network deductibles have risen to nearly $2,000 for small employers, nearly $1,000 for large employers, and 30% of people are in high-deductible CDHPs. The out-of-pocket pain point is high, and employers are balking at pushing it higher. They’ve made hard changes and kept average trend under 3.5% over the last seven years. For 2019, with underlying trend down, employers are deciding to pass up deeper short-term (next year) savings for an investment in the future of cost control – addressing underlying use of care and management of health.
Employers are addressing the causes of cost as dictated by their plan experience. As my colleague Tracy Watts pointed out in this Forbes article, “point solutions” that target specific health conditions—diabetes, heart disease, musculoskeletal issues, mental health, fertility, specialty drugs and more—are making a difference for many employers. They may take more time to reduce medical costs, but those reductions will become the permanent fabric of how people behave and how plans manage care. The move from one-size-fits-all cost management through greater cost-sharing is giving way to a data-driven, behavior- and condition-focused strategy designed to engage plan members and to address trends for years to come.
If you’re ready to look beyond cost-shifting to more future-focused strategies, check back in a couple of weeks for my next post on the value of investment (VOI) these strategies can deliver – ROI beyond medical plan savings.