In a time of rising costs and financial pressure, America’s largest employers are leading a shift in how health benefits are designed. Currently, these companies – with 10,000 or more employees each – collectively spend over $800 billion on healthcare each year and cover more than 165 million people.
Large employers have an enormous influence in re-shaping the market, as these trends will be adopted by small and medium-sized companies. And employers genuinely want to provide best-in-class offerings. It helps with retention and recruitment, and studies have proven the connection between employee health and increased productivity.
Better benefits = better business!
There are several drivers leading employers to finally pay attention:
1. Skyrocketing costs: Healthcare expenses are expected to rise ~10% annually through 2026, with some states facing even higher increases. Employers are no longer passively accepting yearly hikes. They’re taking an active role in strategy and seeking partners who promise cost effectiveness but also innovative solutions.
2. Desire for disruption: Nontraditional plan designs like virtual care, reference-based pricing, and dynamic co-pays are more common. By 2030, nearly 12 million plan members could shift to these more flexible models according to a McKinsey survey.
3. More complex ecosystem: Today, employers manage multiple partners, and insurance vendors have to stand out across heightened evaluation criteria and evolving regulation and risk. This is where we see more digital tools for employees and ROI promises.
Employers want more cost control, alternative PBM pricing, and effective, valuable solutions for their employees.
For healthcare vendors to stay competitive, they’ve got to rethink their sales and pricing strategies. With so much at stake, employers demand partners who are willing to “put skin in the game.”
This shift is creating new expectations for healthcare companies to innovate and deliver results. As a plan sponsor, get ready to request your partners put in the work and meet the needs of the overhaul.
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