Where Employer Health Benefits Are Headed

According to a survey of large employers, many are gravitating to advocacy services that help members navigate their benefits and care.

As health care costs rise faster than wages, employee health benefits are a key tool to attract and retain talent. More than 180 million Americans get health insurance at work, making employer health benefits a cornerstone of the U.S. health care system.

So it’s natural that employers spend a lot of time reading the tea leaves of health trends.

Once a quarter, the Blue Cross and Blue Shield Plans in Illinois, Montana, New Mexico, Oklahoma and Texas survey their largest accounts about these trends. The surveyed companies represent more than 3 million members.

Tools that empower members

According to the most recent survey, many employers are gravitating to advocacy services that help members navigate their benefits and care.

Eight in 10 of the companies have adopted or are considering advocacy services. With this approach, customer advocates may help members find in-network doctors and schedule care at a quality, cost-effective facility. They may even help members earn a reward for choosing a lower-cost provider.

Such rewards are intended to make members more aware of the wide variation in costs and quality for the same medical procedures. About half the surveyed employers now have or may soon adopt ways to reward employees for asking questions about costs before they get care.

Benefits are evolving from simply providing coverage to fully integrated care coordination with one-on-one advocacy.

“Our employer groups tell us that the concierge approach to health care is very beneficial,” says Kevin Cassidy, president of Employer Solutions for the five Blues Plans. “Concierge transparency tools and incentives help employees make informed choices. That can have a tremendous impact on health care spending, by the employer and employees alike.”

Putting employees in charge

Employers are also turning to consumer-directed health plans. Under these plans, members must pay more of the costs up front when seeking care.

The plans are paired with an untaxed health savings account or an employer-funded account to pay for eligible expenses. They’re designed to encourage members to take control of their care decisions and to shop for quality, cost-effective options.

Nearly half of the surveyed companies are considering or have already adopted a consumer-directed plan as the only option for employees.

The need to change

Large employers cover about 70 percent of the total annual health care costs for each employee, according to a 2018 survey by the National Business Group on Health.

“Employers are recognizing that traditional cost control techniques alone aren’t able to reduce costs to the point where they are no longer a drain on the bottom line,” Brian Marcotte, CEO of the NBGH, said in a news release about rising health care costs.

Employers are turning to new payment models to help control health care spending, Marcotte says. Doctors still generally get paid for each visit, test or treatment — with or without good outcomes. Under these new models, part of their pay is based on the quality and efficiency of the care they provide.

Other cost-control strategies include:

  • Providing telehealth (virtual doctor visits)
  • Providing on-premise health centers to provide care at a lower cost
  • Using centers of excellence for specialty procedures, such as transplants and orthopedic surgery, to improve care and lower costs.

Without these strategies, the growth of health care costs is unsustainable, according to a new report by the PwC Health Research Institute.

“In light of rising health care spending, benefits are evolving from simply providing coverage to fully integrated care coordination with one-on-one advocacy,” Cassidy says. “More employers are looking for plans that further integrate pharmacy and behavioral health programs in an effort to look at employee health more holistically.”

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