Employers seek to balance employee needs, health care costs as they look to future

Containing rising health care costs while recruiting and retaining a talented workforce is a challenge for employers. However, 6 in 10 are implementing initiatives to address both, according to the 2023 Best Practices in Healthcare Survey from WTW.

“As companies face steep health care cost increases, they are not losing sight of the importance of addressing employees’ needs,” said Courtney Stubblefield, the company’s managing director for health and benefits. “However, it’s not a simple challenge for employers to navigate. Each employer needs to find the unique portfolio of programs and solutions that will best control its costs while meeting the health care and specific needs of its organization.”

The survey found that more than two-thirds of U.S. employers are focused on managing health care plan costs. This follows a projected cost increase next year of 6.4%, compared with the average 6% increase employers experienced this year. Almost as many employers (63%) are focused on enhancing mental health and emotional wellbeing programs. Other priorities include employee experience (40%); communication (38%); diversity, equity and inclusion (37%); and employee affordability (34%).

Employers increasingly are taking action to manage costs and enhance affordability through health plan and vendor efficiencies. Although 37% of employers currently are implementing programs or using vendors that will reduce costs, 50% are planning or considering doing so in the next two years. And although less than one-third put vendor/health plans out to bid, 47% are planning or considering doing so.

Several strategies are being used to control costs at the point of care, including:

• Planning or considering offering a narrow network of higher-quality and/or lower-cost providers in the next two years (24%);
• Planning or considering using centers of excellence within health plans (19%);
• Carving out specialty pharmacy services (16%); and
• Offering plan options that restrict or eliminate out-of-network coverage for non-emergency services (3%).

Other areas of focus are prescription drug costs; navigation and virtual care strategies; and mental health.

Related: 2023 average health care cost projections for employer-based plans

“Aligning business priorities, from workforce transformation to health care costs to employee wellbeing, requires a constant evolution of benefit programs, culture and employee experience,” said Regina Ihrke, senior director of health and benefits for WTW. “By doing so, companies can alleviate strains on attracting and retaining talent, enhance worker health and productivity, and gain competitive advantage.”