ARLINGTON, VA, April 27, 2017 — Recognizing that no single change will radically transform the cost structure of health care programs, U.S. employers are instead following a strategy of taking many concurrent steps to manage costs, according to a new survey by Willis Towers Watson (NASDAQ: WLTW), a leading global advisory, broking and solutions company.
Employers said their top three priority changes for 2017 are: 1) increasing employee point-of-care costs by adjusting deductibles, out-of-pocket maximums and out-of-network coinsurance (51%); 2) modifying vendor strategies by expanding wellness programs or changing vendor partners (32%); and 3) adding new provisions to prescription drug plans to encourage appropriate utilization (30%).
These findings stem from the Willis Towers Watson 2017 Emerging Trends in Health Survey of 666 U.S. employers. The survey also found that curbing pharmacy spend will remain a focus over the next three years, with the cost and delivery of specialty drugs as the top priority for 58% of employers.
“Employers have learned that building a high-performing health care program requires juggling many things at once,” said Julie Stone, a national health care practice leader at Willis Towers Watson. “Through careful management of participation, subsidies, and the efficiency of their health care and well-being programs, employers can outperform their competitors by keeping health care costs down.”
From a high of 14.7% in 2002, the expected health care cost increase for 2017 is 5.0% after plan changes and 6.0% without.*
Added Stone, “The broad aspects of employee health care present like the carnival game, whack-a-mole: No sooner does an employer have one challenge under control than a new one pops up. For example, despite success managing costs in many areas, employers now must deal with the high cost of prescription drugs in the United States. It’s a complex problem with no single solution that will continue to test employers in the coming years.”
Accordingly, employers have many priorities when it comes to their health and well-being programs. However, improving the overall employee experience with these programs is a priority for nearly all employers (96%) over the next three years. Perceived benefits of improving the employee experience are better employee engagement in health care decisions (89%), increased satisfaction with the health care program (81%), improved appreciation of well-being programs (78%) and direct impact on long-term costs (74%).
“Despite the complexity of their short-term cost management challenges, employers are taking decisive action on a number of fronts that will pay dividends in the future,” said Stone. “This level of activity is not expected to slow down anytime soon.”
Actions employers will take to improve the employee experience of the health care program include:
- Implement a high-tech enrollment process with decision support. 40% have done so; another 35% are planning to or considering it.
- Offer greater choice of health plan options and types of benefits. 38% do so; another 26% are planning to or considering it.
- Improve navigation of health care providers. 30% have done so; another 36% are planning to or considering it.
Actions employers will take to improve the employee experience of the well-being program include:
- Provide access to a portal for tracking activity and incentives. 51% do so; another 26% are planning to or considering it.
- Routinely ask for employee feedback to enhance program offerings. 39% do so; another 32% are planning to or considering it.
- Personalize rewards for employees who engage in the well-being program. 36% do so; another 27% are planning to or considering it.
- Offer access to tools to help households meet their financial goals. 35% do so; another 33% are planning to or considering it.
“Effectively managing health care plans requires a multifaceted approach,” said Stone. “Because there is no magic bullet, employers are engaging a variety of approaches to improve the value of these plans for their employees.”
About the survey
The Willis Towers Watson 2017 Emerging Trends in Health Care Survey was fielded in January 2017 to determine how U.S. employers with at least 200 employees use and deliver health care programs and services. The 666 employers that responded represent 9.3 million employees, including 6.5 million full-time employees, across a variety of industries.
About Willis Towers Watson
Willis Towers Watson (NASDAQ: WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 40,000 employees serving more than 140 countries. We design and deliver solutions that manage risk, optimize benefits, cultivate talent and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas — the dynamic formula that drives business performance. Together, we unlock potential. Learn more at willistowerswatson.com.