Employer Survey Finds High-Cost Claims and Hospital Prices are Major Concern

Rising healthcare costs continue to be a concern among employers. In fact, 82% of respondents said rising healthcare costs impacts their own organization’s competitiveness, according to the results of a survey by the National Alliance of Healthcare Purchaser Coalitions.

Concerns are rising about healthcare affordability, and many express a lack of confidence in the integrity of services and fees charged by hospitals, pharmacy benefit managers, third-party administrators, and brokers and consultants.

The Pulse of the Purchaser included 172 responses from private and public employers and purchasers. Respondents were from manufacturing, educational services, public administration, finance and insurance, and healthcare and social assistance institutions. Purchasers ranged in size with 38% having more 5,000 employees, 36% have between 1,000 and 4,999 employees and 26% have less than 1,000 employees.

The survey aimed to gauged concerns and approaches of employers to address the workforce environment; equity, women’s health, mental health and obesity management; fiduciary perspectives; pharmaceutical drugs; high-cost claims; and potential health reforms.

Most employers who obtain coverage for high-cost claims do so through purchasing stop-loss (69%) or by using a captive reinsurer (11%); those considering coverage in the next one to three years are more likely to consider using a captive reinsurer versus purchasing stop-loss.

Most plan sponsors believe hospital prices are unreasonable and they are getting selective in their strategies for managing these costs. Today, 41% of respondents currently use centers of excellence and 37% have site of care strategies. In the near term, however, they are considering using advanced primary care, tiered networks, and reference-based pricing.

Employer focus on mental health, diversity and health equity continue to increase. From 2022 to 2023, interest in integrating mental health with physical health has grown 18% and analysis of access and quality of services to ensure health equity have grown by 13%.

More than 70% of those surveyed provide mental health support resources and in the next one to three years, 27% plan to integrate behavioral health into primary care.

Common obesity benefits today include lifestyle programs, bariatric surgery, and obesity medications with conditions; in the near future, 45% of respondents plan a phased approach to medication-assisted support for obesity and 35% plan to provide coverage for obesity medications.

Additionally, more than 80% of employers support both PBM and hospital reforms. The survey found that employers want greater financial control of their PBM relationships. In fact, 63% want to own their data and 55% want full audit rights. Additionally, 63% of those surveyed want full disclosure of all revenue streams from PBMs in the next one to three years and 59% want transparency regarding net cost by drug. And 49% want a comprehensive definition of the term rebate.

Employers in the survey are not confident in the practices of PBMs, and 51% are concerned about PBM integrity and administration. And 48% are concerned about whether PBM direct and indirect compensation is reasonable.

In terms of formulary management, 49% of those surveyed said in the next one to three years they want to use a value-based formulary versus a rebate-driven formulary, and 43% want the flexibility to customize the formulary with penalty.

In terms of claims, 62% of survey respondents said they review pharmacy claims that go through the medical benefits, and another 26% are considering reviewing these claims.