The pandemic sparked a seismic shift in health care costs for large employers. From 2019 to 2020, costs remained stable. Large companies then reported an average 8.2% increase in employee health care costs in 2021.
The Business Group on Health says that large companies are now looking at fundamental delivery system reforms including advanced primary care and centers of excellence for specific health conditions as a means to control unsustainable health care expenses and prescription drug costs.
High Cost of Delayed Health Care
It is believed that delayed preventive health screenings and other essential care during the pandemic are a leading factor behind rising health care costs. The consequences of employees who may have delayed care during the pandemic will contribute to higher costs for years to come.
Already, 13% of large employers recently surveyed by the Business Group on Health reported an increase in late-stage cancer health claims. As many as 44% of employers expect to continue to see a rise in late-stage cancer claims.
For the first time in the survey’s history, cancer is now the leading driver of employers’ health care costs. Musculoskeletal conditions and heart disease remain closely behind cancer with regard to cost burden.
Although employers recognize that the rising cost of health care is not on track to plateau any time soon, 82% of survey respondents expect to continue to cover the cost of their employees’ coverage. This is up 2% over the previous year’s data.
Cost-Effective Solutions for Employers and Payers
Employers are seeking solutions and cost efficiencies to be able to continue to provide their employees with access to quality health care. Concern about the cost of prescription drugs was reported by nearly every survey respondent (99%).
The Business Group on Health noted that by providing biosimilar coverage, site of care, and case management among other pharmacy program tactics, employers could see a reduction in their prescription drug costs.
Insurance companies can also improve their relationships with workplaces by continually growing their provider networks in a way that will return notable cost savings for both parties. Expanding virtual health care providers, particularly in the field of mental health is just one example where TOG has seen a significant return on investment for its clients.