The Squeeze: Promoting a Healthy Workforce in the Face of Exploding Health Care Costs

Nearly half of Americans get their health insurance through their employer. Those employers increasingly struggle to afford their workers’ health care, as costs for coverage rose nearly four-fold over the past 20 years.

According to the Kaiser Family Foundation, premiums for employer-sponsored health coverage for a family of four reached $22,221 in 2021, up 4% from 2020. Workers on average paid $5969 toward the cost of this coverage.¹ Additional contributions in the form of copays for services and medications add additional burden to worker health care costs.

Fifty-eight percent of small firms and 99% of large firms offer health benefits to at least some of their workers. The cost is a burden for families and employers.

Forced to pass some of those costs to employees while mitigating impact on the company’s bottom line, CEOs and health benefit managers can no longer take a passive role in funding their employees’ health, especially when they are not seeing significant progress on population health metrics such as rates of overweight and obesity. Many employers are learning about, and implementing the principles of value-based purchasing, a range of strategies aimed at improving population health and increasing health care value. 

One such strategy, Value-based Insurance Design (VBID), aims to increase value by using financial incentives to promote cost efficient health care services and consumer choices.  While traditional health insurance plans generally use patient cost-sharing primarily to control costs, VBID plans use cost-sharing as a tool to align patient and payer financial incentives around the value of specific health care items and services. Health benefit plans can be designed to reduce barriers to maintaining and improving health. By covering preventive care, wellness visits, and treatments such as medications to control blood pressure or diabetes at low to no cost, health plans may save money by reducing future expensive medical procedures.² Health insurance management becomes an opportunity to invest in a healthier, more productive work force.

I asked Neil Goldfarb, the President and CEO of the Greater Philadelphia Business Coalition on Health and a faculty member in our population health education program, what he would consider the “top 5 steps” employers can take to manage health care costs more effectively, while promoting employee population health and healthcare value. NeiI has extensive experience working with businesses to achieve these goals. I compare his list to mine.

Neil’s top 5 include the following:

1. Align benefits to promote use of high-value services (VBID), starting with diabetes drugs and supplies.
2. Implement a comprehensive approach to obesity, including coverage of lifestyle programming (eg, Diabetes Prevention Program), pharmacologic coverage of FDA-approved anti-obesity medications, and coverage of bariatric surgery with minimal barriers to access.
3. Review mental health benefits to ensure timely access to care, and review Employee Assistance Plan (EAP) service utilization; continue messaging on availability of range of benefits and service.
4. Promote primary care: help ensure that your population understands the importance of selecting a primary care provider, review data to track primary care utilization, and reduce coverage of urgent care.
5. Improve communication of health and benefits messaging—it needs to be a year-round effort with easy access to assistance when needed; consider engaging a concierge service to help steer people at the time of need to the appropriate services.

And for comparison—as a teacher of population health and a family physician—my top 5 approaches are as follows:

1. Look at your data! Identify trends in disease and/or costs, and assess whether you might have an impact.
2. Work with a multidisciplinary team (HR professionals, clinical leaders, finance advisers, payer representative if applicable, analytics team members, and employee representatives) to develop your strategy, plans, and outcome measurements.
3. Align your benefits strategy with your goals. Remove barriers to prevention and chronic disease management.
4. Engage with your employees and healthcare providers on a few simple goals that will have greater impact such as smoking cessation, weight loss promotion, primary care alignment, reducing emergency department utilization, or addressing pharmacy adherence and costs.
5. Measure your progress and share it (or lack of it) across your organization. Tell success stories and celebrate wins!

There are synergies and multiple common themes between Neil’s and my list. If you have responsibility for your employees’ health, which of these are steps you have taken, or could take, to promote a healthier workforce? Share your feedback below.

Neil and I recently participated in some brief podcasts discussing these issues. You can listen to them here.

As always, I welcome your questions and feedback on our Population Points columns and any other population health topics. Until next month!

References:

1. Claxton G, Rae M, Damico A, et al. Health benefits in 2021: employer programs evolving in response to the COVID-19 pandemic. Health Affairs 2021;40(12): 1961-1971. doi:10.1377/hlthaff.2021.01503
2. National Conference of State Legislatures. Value-based insurance design. Updated February 20, 2018. Accessed June 13, 2022. https://www.ncsl.org/research/health/value-based-insurance-design.aspx