As employers prepare for a new administration and seeing some of their taxes and reporting requirements repealed, they are looking closely at cost drivers and benefit trends in 2017.
Specialty pharmacy is at the top of employers’ list of healthcare cost concerns, according to a survey of large employers in 2016 from the National Business Group on Health. For now, employers are limited to dealing with the rising cost of drugs through benefit design, such as prior authorization, quantity limits, step therapy, and formulary drug tiering.
But NBGH will be releasing recommendations for Congress on how to rein in pharmacy costs. Recommendations will range from more flexibility for employers to negotiate risked-based pricing arrangements to putting manufacturers on the hook for costs through aligned incentives.
The trend toward consumer-directed health plans appears to be hitting a saturation point, as there’s not much room for growth with most large employers already offering at least one CDHP. In 2017, 84 percent of large employers will offer at least one CDHP, up from 83 percent in 2016, according to the NBGH survey.
HealthLeaders-InterStudy data from Decision Resources Group shows that enrollment in CDHP plans dropped slightly year over year as of January 2016 after double-digit percentage increases the two previous years. While CDHP enrollment may be slowing, expect to see growth in tools that can help employees to comparison shop healthcare costs in order to save money.
Telemedicine will continue to grow and become a larger portion of the care delivered as employers search for more affordable options. Ninety percent of large employers will make telehealth services available to employees in states where it is allowed in 2017, a substantial increase from 70 percent in 2016 and 46 percent in 2015, according to the NBGH survey. Growth is due to more insurers covering virtual visits, and large employers contracting directly with telehealth vendors.
Nationally, the use of private exchanges has not grown as quickly as some predicted. Large employers have not been convinced that private exchanges can provide sustained, reduced costs, according to the NBGH survey.
What is growing is employers’ commitment to programs that provide value-based care with the goal of increasing quality and lowering costs. Employers continue to add bundled payment programs for certain episodes of care, accountable care arrangements, and medical homes. They are also expanding the number of conditions patients can be treated for at Centers of Excellence. These programs offer incentives for employees to have procedures performed at high-rated medical centers in order to ensure quality at a lower cost.
In 2016, Boeing expanded its direct-contract ACO to Orange County, California, health system MemorialCare, creating an ACO health plan that eliminates the insurer and places risk on the provider. Savvy employers are looking at options for directly contracting with providers, and health systems in many markets have been expanding their continuums of care to be able to meet the needs of employers seeking direct contracts.
Public policy will play a role in 2017 as well, as the Affordable Care Act is most likely repealed and replaced. How new regulations will impact employer-sponsored coverage remains to be seen.