Employers Seek New Designs to Control Cost of Health Benefits

Patrick Connole

When it comes to finding efficient and more cost-effective ways to provide health benefits to employees, it is likely that medium- to large-sized skilled nursing and assisted living operators are part of a national trend among larger employers to try new models for managing such costs.

The subject of what these new models may look like is part of the National Business Group on Health’s (NBGH’s) annual “Large Employers’ 2018 Health Care Strategy and Plan Design Survey,” which captures the latest trends for the remainder of 2017 and into next year.

According to NBGH, employers estimate the total cost of providing medical and pharmacy benefits to their workers will rise 5 percent for the fifth consecutive year in 2018. When taking into account premiums and out-of-pocket costs for employees and dependents, the total hit is pegged to be $13,482 per employee this year, and projected to rise to an average of $14,156 in 2018.

NBGH said employers will cover almost 70 percent of those costs with employees picking up the rest, or 30 percent, which is some $4,400 in real dollars for 2018.

These employers ranked specialty pharmacy as the top driver of cost increases, with nearly 80 percent of those surveyed putting drugs among the top three cost drivers. NBGH said specialty pharmacy costs will likely remain a paramount concern as new high-priced drugs come on the market.

With another 5 percent ride in health care benefit costs staring them in the face, NBGH said employers it spoke to are examining how health care is delivered and paid for while still pursuing traditional methods for controlling costs, like cost sharing and plan design.

Some forms of this new focus on delivery include allowing more employees access to broader health care services, including telemedicine, Centers of Excellence (where the most efficient health systems provide care) and onsite health centers.

In a breakdown of the numbers, NBGH listed the following trends to watch:

  • Telehealth utilization surging. Nearly 100 percent of employers surveyed will make telehealth services available in states where it is allowed next year. And, more than half (56 percent) will offer telehealth for behavioral health services, more than double the percentage in 2017. Overall, telehealth utilization is climbing rapidly, with nearly 20 percent of employers experiencing employee utilization rates of 8 percent or higher.
  • Accountable Care Organizations (ACOs) could double in use by 2020. This prediction comes from the survey question that showed 21 percent of employers plan to promote ACOs in 2018, but that number could double by 2020 as another 26 percent are considering offering them.
  • Employers opening health centers. More than half of employers (54 percent) plan to offer onsite or nearby health centers in 2018, and that number could increase to nearly two-thirds by 2020.
  • Centers of Excellence (COEs) embracing bundled payment arrangements. Almost nine in 10 employers (88 percent) expect to use COEs in 2018 for certain medical procedures such as transplants or orthopedic surgery. Of these, employers said bundled payments or other types of alternative payment arrangements will be used by 21 percent to 48 percent of COEs contracts, depending on the medical procedure or condition.
  • Controlling surging specialty pharmacy costs. Some 44 percent of employers will have site of care management tactics in place in 2018, a 47 percent increase over this year.In addition, 70 percent of employers will use more aggressive utilization management protocols.

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