This is now the biggest driver of employers' healthcare costs, survey shows

Cancer has overtaken musculoskeletal conditions as the biggest driver of employer health costs, according to a new survey.

The Business Group on Health released its annual survey of large employers examining their strategies around benefit design, cost management and other healthcare strategies. Thirteen percent of the employers surveyed said they have seen more late-stage cancers among their employees, and 44% anticipate similar increases coming down the pike.

This trend is likely a lingering result of COVID-19 increasing delays in care and preventive services.

Overall, the 135 large employers surveyed report cost increases have returned in a big way as care utilization stabilizes at closer to pre-pandemic levels. There was no increase in actual healthcare costs between 2019 and 2020, and then an 8.2% hike in 2021, the survey found.

"We have a lot of concern that this situation will worsen as those pandemic-driven care delays come to bear," said Brenna Shebel, vice president of the Business Group on Health, during a briefing with reporters Tuesday.

For this year, employers said they expect to cover 82% of workers' health costs, up from 80% in 2021. Employers have been hesitant of late to shift further costs to employees as they rise and instead are considering a variety of reforms including advanced primary care and centers of excellence, the survey found.

While they haven't turned away from initiatives targeting out-of-pocket costs and premiums for employees, employers are putting an increasing focus on policy efforts that lower healthcare and prescription drug costs more widely, the Business Group on Health found. Of particular focus is the cost of maintenance medications as well as pricey gene therapies.

In addition, 24% of employers said the affordability of mental health services is important to them, according to the survey.

Most (99%) of employers surveyed said they were concerned about prescription drug costs. In 2021, drugs accounted for 21% of their health costs, and more than half of that was for specialty medications alone, the survey found. Employers are weighing multiple solutions to address these costs, including an increasing emphasis on covering biosimilars.

Ellen Kelsay, CEO of the Business Group on Health, said during the briefing that a lot of tools employers can use to address drug costs are merely "Band-Aids" over the real issue at hand: drug pricing.

"We really do feel, and our employer members feel, that there needs to be a fundamental look at the pharmacy supply chain," Kelsay said.