“II don't know why they call it health insurance. Because they're not paying for health, and they certainly don't seem to have a plan. ”
This is from an employee focus group I conducted when I co-founded RedBrick Health, a digital platform designed to help people develop healthier habits and make smarter healthcare decisions. Those are impressive words.
That was in 2006. Sadly, this sentiment will be alive and well in his year 2024, with employees still dissatisfied with health benefits and employers struggling to provide health benefits that attract and retain top talent. I feel it is difficult.
Employer-sponsored health benefits are a cornerstone of America's health care system, but the system faces significant challenges that impact the stability of employers, employees, and the health care environment itself. Understanding these challenges is critical to forging a new path towards sustainable and equitable access to health care.
rising costs
The most obvious challenge facing employers is ever-increasing costs. Insurance premiums have been rising steadily, outpacing wages and inflation, placing a burden on both employers and employees. WTW my employer expects health insurance premiums for most companies to increase from 6% to 7.5% in 2024. The industry seems to agree that this healthcare trend is here at its highest level in nearly a decade.
Costs are increasing due to improved technology, hospital staffing shortages (particularly nurses), an aging population, and shifting costs from the public sector to the private sector. However, as the number of high-paying individuals increases, more and more employers are facing significant increases. Employers have seen increases in the cost of health care plans for cancer, diabetes, obesity (due to exploding demand for GLP-1 drugs such as Ozempic), fertility, mental health, and rare genetic conditions.
Changing needs and changing demographics
Employers are facing pressure from their boards to align pay and benefits with company goals and make them affordable and fair to employees. Employers also face pressure from employees. The workforce is changing as demographics become more diverse and employee needs evolve. Younger generations often prioritize flexibility and affordability. Meanwhile, an aging population requires specialized care and chronic disease management, making healthcare planning more complex.
Although some employers offer a variety of plans, many workers have limited options and often have high out-of-pocket costs. Many employers are choosing high-deductible health plans (HDHPs) to control their own costs, placing a greater financial burden on employees. This trade-off can lead to delayed treatment, underutilization of preventive services, and ultimately to poor health outcomes.
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Innovation leads the way
Despite these challenges, glimmers of hope and opportunities for innovation exist. Several potential solutions have emerged, including:
- “Valuable Rewards” Plan: These plans provide a clearer breakdown of costs and out-of-pocket costs, allowing employees to make informed choices and access efficient (cost-effective), high-quality health care providers and treatments. You can choose the law.
- Values-based care model: Options exist for Centers of Excellence (COE) and high-performance primary care models that leverage new contract formats, moving from fee-for-service to paying for prevention, quality care, and outcomes-based action. Move to a defined value-based care model. Encourage better health and lower costs.
- Employee benefits program: By investing in preventive care and healthy lifestyle initiatives, you can reduce healthcare costs and improve employee productivity.
- Technology adoption: Integrating telemedicine, data analytics, and artificial intelligence will improve access, affordability, and coordination of care.
- Risk mitigation tools Captive policies and stop-loss policies to protect your plan from high billers.
Looking to the future
Employers must play a role in managing the health of their employees, promoting well-being, and adjusting health coverage to meet their evolving needs. This requires a commitment to collaboration, adaptability, and innovation. By embracing new models, leveraging technology, and prioritizing value, employer-directed health benefits will evolve into a system that serves both employers and employees, making it more equitable and accessible in the coming years. We can contribute to creating a medical environment that is easy to care for.
