It shouldn't come as much of a surprise that employers are putting a focus on managing healthcare costs in the coming year. And a new analysis from WTW highlights some of the areas in which they're aiming to addressing these expenses.
The consultancy surveyed 457 employers representing 7.3 million workers in June and July, and it found that 62% of firms are planning to roll out programs to address cost and mental health as part of a broader strategy around health and wellness.
More than two-thirds of companies (69%) said they'll be focusing on costs, and 63% said they'll be addressing mental health care, according to the report.
Regina Ihrke, senior director for health and benefits at WTW, told Fierce Healthcare that while employers are highly concerned about potential healthcare costs increases, they're trying to strike a balance between managing those costs and designing a benefits package that draws in and retains top talent.
"We're in an economy where we're starting to see more and more pressure," Ihrke said.
Employers are expecting healthcare costs to rise by 6.4% on average next year. To mitigate this, they're taking a look at the relationships they have with vendors and health plans to identify areas where they can reduce expenses.
More than a third (37%) said they are rolling out programs or finding vendors who can address costs, and 50% are considering similar steps within the next two years, according to the survey.
In addition, nearly half (50%) said they are considering a move to put their health plans and/or vendor relationships out to bid. Thirty-two percent said they have already done so.
In a similar vein, many of the surveyed employers said they're taking a closer look at their provider networks as a way to curb costs. About a quarter (24%) said they're either planning or considering a narrow network focusing on higher quality and lower cost over the next two years, and 19% said they're looking to work with their insurer to include a center of excellence.
Pharmaceutical costs are also a major focus, according to the report. At present, just 16% of employers require workers to switch to a lower-cost biosimilar drug when there is one available. However, 27% said they are considering a similar requirement.
Ihrke said employers are looking at biosimilar products similarly to generics, which are typically preferred products on formularies. Interest in biosimilars is growing as competition ramps up for Humira, a drug that on its own is a huge source of drug spending.
The potential to deploy biosimilars to manage drug costs is even greater, she said, as GLP-1s and other drugs for weight loss and diabetes continue to see high demand. The survey found that 38% of employers currently cover these drugs, and 6% plan to cover them for 2024.
And additional 16% said they're considering coverage for these drugs in 2025.
The rise in interest in these therapies, Ihrke said, circles back to employers' considerations around vendor relationships, as new solutions emerge in the market to manage weight and diabetes.
"Most of the time when we're talking to an employer about a strategy in these areas, it is multidimensional," she said. "There is a design component, there is a vendor component."