The healthcare industry is undergoing significant shifts, driven by rising costs and evolving perceptions of care for employer-based health plans nationally. Understanding these trends and providing solutions for cost-conscious business owners is paramount to recruiting and retention as the workforce transitions to younger generations with varied needs and priorities. Business owners and executives need awareness of the trends shaping the industry and while implementing actionable strategies for managing ever increasing employee healthcare expenses.
- Rising Healthcare Costs: Multiple sources nationally continue to predict that healthcare expenses are expected to continue to escalate, with projections indicating a likely 5.4% increase in national health spending annually through 2028, reaching nearly $6.2 trillion. This upward trajectory is driven by factors such as an aging population, advancements in medical technology, and increasing prescription drug prices.
- Increased Focus on Preventive Care: Employers and insurers are placing greater emphasis on preventive care to reduce long-term costs. This includes wellness programs, regular health screenings, and chronic disease management initiatives.
- Telehealth Expansion: The COVID-19 pandemic accelerated the adoption of telehealth services. This trend is expected to continue, offering cost-effective alternatives to in-person visits and improving access to care, especially in rural areas. Furthermore, telehealth options have largely become one the primary means of care for ongoing mental health related treatment.
- Value-Based Care Models: There is a shift from fee-for-service to value-based care models, which focus on patient outcomes rather than the volume of services provided. This approach aims to enhance care quality while controlling costs.
- Employee Health and Well-Being: Employers are increasingly recognizing the importance of employee health and well-being. Comprehensive benefits packages, mental health support, and flexible work arrangements are becoming integral to employee retention and productivity.
- Evaluate Health Plan Options: Regularly review and evaluate health plan options to ensure they align with your company's needs and budget. Consider high-deductible health plans (HDHPs) paired with Health Savings Accounts (HSAs) to lower premiums and provide tax advantages.
- Implement Wellness Programs: Invest in wellness programs that encourage healthy behaviors among employees. Programs focusing on physical activity, nutrition, and mental health can lead to reduced healthcare costs and improved employee well-being.
- Promote Telehealth Services: Encourage the use of telehealth services for non-emergency consultations. Telehealth can offer significant cost savings compared to traditional office visits and provide convenient access to care.
- Adopt Value-Based Care Initiatives: Partner with healthcare providers that prioritize value-based care. This approach can lead to better health outcomes and cost savings by focusing on preventive care and chronic disease management.
- Leverage Data Analytics: Utilize data analytics to gain insights into healthcare utilization and identify cost-saving opportunities. Data-driven decision-making can help optimize benefits offerings and manage expenses more effectively.
- Offer Flexible Benefits: Provide a range of benefits options to meet diverse employee needs. Flexible benefits plans can enhance employee satisfaction and allow for more efficient allocation of resources.
- Utilize Individual Coverage Health Reimbursement Arrangements (ICHRAs): An ICHRA allows employers to reimburse employees for individual health insurance premiums and qualified medical expenses. This approach provides flexibility and control over healthcare costs. By setting a fixed contribution amount, employers can better predict and manage their healthcare expenses. Additionally, employees gain the freedom to choose coverage that best suits their needs, potentially leading to higher satisfaction and better health outcomes.
Amid rising healthcare costs, business owners must proactively manage their annual healthcare expenditures and develop a long-term strategy. By staying informed about industry trends and implementing strategic cost-containment measures, employers can provide valuable benefits to their employees while maintaining financial stability. At HUB International, we leverage these insights and stay tuned to emerging industry trends enabling and guiding our clients toward sustainable, cost-effective healthcare solutions.
By understanding and adapting to these healthcare industry trends, business owners and executives can navigate the complexities of rising costs by implementing effective solutions that benefit both their business and their employees.
- Centers for Medicare & Medicaid Services. (2020). National Health Expenditure Projections 2019-2028. Retrieved from CMS.gov.
- American Telemedicine Association. (2021). Telehealth: Defining 21st Century Care. Retrieved from americantelemed.org.
- Kaiser Family Foundation. (2021). 2020 Employer Health Benefits Survey. Retrieved from KFF.org.
