How Employers Are Trying To Tame Healthcare Costs

High drug prices, high-cost claims and hospital prices are the biggest threats to the affordability covering the healthcare cost of their employees, according to the results of a survey of 188 private and public sector healthcare purchasers that was released today.

Changing the site of care to lower-cost settings, designating certain hospital as center of excellence and therefore preferred as a place to get care, and promoting biosimilars on formularies are among the strategies employers say they are deploying — or planning to deploy — to combat mushrooming healthcare costs, according to the survey results.

The survey, dubbed Pulse of the Purchaser, was conducted by the National Alliance of Healthcare Purchaser Coalitions in September and October. The respondents were evenly distributed across a range of industries and sectors and size,as measured by the number of employees (24% of the respondents had fewer than 1,000; 40%, 1,000 to 9,999; 25%, 10,000 to 49,999; and 11%, 50,000 or more).

Whether pharmacy benefit managers are working on their behalf has become an issue among healthcare purchases, and just over half (52%) of the survey respondents indicated that they are considering changing their pharmacy benefit manager. Almost two-thirds (65%) respondents indicated that they are using nontraditional pharmacy procurement to counter high-cost claims. A similar proportion said they are also currently carving out prior authorization and reviewing pharmacy claims through the medical benefit as ways to deal with high-cost claims.

The most popular strategies for dealing with hospital pricing included centers of excellence, site of care policies and advanced primary care.

Direct contracting between payers and hospitals had received a garnered a good deal attention several years ago as a way to curb spending and reward hospitals that provide quality care. But in this survey, only 17% of the respondents said they were currently using direct contracting as a response to hospital prices. “We have been talking to the local hospitals for over a year. We would like a direct contract, but they are not willing to discuss,” an anonymous survey respondent was quoted as saying in the slide deck presenting the survey results.

Payers of all kinds are dealing the surging demand for the glucagon-like peptide 1 (GLP-1) drugs and the comes that comes with them. Less than half (46%) of the respondents to the purchaser coalitions’ survey indicated that they are currently covering GLP-1s for obesity, although one-fifth (21%) indicated that they are planning to do soin the next 1-3 years.

The vast majority (91%) of the respondents currently covering GLP-1s — considering doing so in the future — limit access to them to certain populations, and almost as many (86%) make access based on lifestyle changes. Two-thirds (67%) indicated that they would partner with a “point solution” vendor to manage access to the GLP-1s and similar percentage (64%) indicated they would be covering compounded GLP-1s, which are less than the brand-name versions.

Results of the KFF survey of employer health benefits released earlier this month showed the cost of premiums on an annual basis for covering a single individual this year is, on average, $8,951, and for a family, $25,572. The purchasing coalitions’ survey showed slightly lower costs in 2023: $8,435 for a single individual and $23,968 for a family.

Here are some other findings from the survey:

• 38% of the respondents strongly agree that high healthcare costs will result in cost shifting to employees
• 55% indicated that PBM conflicts of interest are a “significant threat” to healthcare affordability for employers
• 30% currently offer menopause support and resources, up from 14% in 2023
• 55% offer reproductive healthcare and fertility services, up from 49% in 2023
• 67% are integrating behavioral health into in-network primary care services, up from 39% in 2023