Employers Looking Beyond High-Deductible Health Plans to Solutions that Empower Workers

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Source: FierceHealthcare

Employers are seeking more innovative ways to manage healthcare costs while hitting the pause button using high-deductible health plans (HDHPs) to do it, a new survey shows.

Mercer released its annual survey of the employer-sponsored health plan market Monday in conjunction with the HLTH conference and found that large and midsized employers (500 workers or more) raised deductibles for PPO plans on average by just $10 in 2019.

The survey, which polled 2,558 employers with at least 10 employees on their health benefits, also found the number of companies offering workers solely an HDHP declined, particularly among employers with 20,000 or more employees.

Among those employers, 16% offered solely an HDHP in 2019, down from 22% in 2018.

“In general, with five generations of workers in the workplace, we need more choice,” Tracy Watts, Mercer’s national leader for health policy, told FierceHealthcare in an interview at the conference. “It’s not one-size-fits-all.”

She said, however, that HDHPs are far from dead—they’re just becoming rarer as the sole option for workers. One reason for that is employers want to try new things, such as direct primary care, which aren’t options for now in consumer-directed plans with health savings accounts.

A direct primary care contract or an on-site clinic is especially attractive for employers who are concerned about managing the health of low-income workers. A factory worker working long shifts, for example, may not be able to get to a doctor, which could result in worse health, Watts said.

Moving toward these strategies to manage costs also improves employee health and worker retention, she said, and empowers them to manage their health more effectively. Mercer’s survey found that 58% of large and midsized employers are deploying alternative solutions like direct primary care.

“It can help create better stickiness,” Watts said

The National Business Group on Health identified similar trends in its annual survey of large employers, which was released in the summer. Both surveys highlight a shift in approach for employers, who remain highly concerned about healthcare costs but recognize continuing to shift those costs to employees is increasingly untenable.

Mercer’s survey found that healthcare costs are continuing to increase at a relatively low rate, for a projected 3.6% in 2020, but at a clip that still surpasses the rate of inflation and worker’s wage growth.

As such, employers ranked affordability concerns—particularly managing workers with high claims costs and specialty drugs—as key priorities for the next five years. Eighty percent said better managing high-cost workers was either a very important or important priority, and 71% said the same about specialty pharmacy.

The survey found a 5.5% increase in pharmacy trend, which Watts said is lower than what they’ve reported in the past but is still a double-digit boost.

“It’s lower than what we’ve seen, but I don’t think we’re going to declare a victory on 5.5% trend,” Watts said. “It’s concerning for employers—it’s the biggest thing.”

Last Updated 11/13/2019

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