Employers Aggressive About Improving Cost and Effectiveness of Health Plans

The top three priorities for employers are managing pharmacy costs, evaluating health program design value and increasing participant engagement in health and well-being, a survey finds.

Employers’ confidence that they will offer benefits 10 years from now rose to 54% in 2016 from 44% last year, more than double the lowest confidence levels in 2012 (23%), according to findings from Willis Towers Watson’s 21st annual Best Practices in Health Care Employer Survey, conducted in the summer of 2016.

Even as questions grow about the Affordable Care Act’s (ACA)’s future, employers continue to focus on controlling costs and adopting solutions to improve the effectiveness of their health care programs.

Over the next three years, employers’ top priority is managing pharmacy costs, specifically specialty drugs (88%). In 2016, 61% of employers surveyed adopted new coverage or utilization restrictions as part of their specialty pharmacy strategy (e.g., required prior authorization or quantity limits based on clinical evidence); 10% plan to do this is 2017.

Other strategies include:

  • Evaluate and address specialty drug costs and utilization performance through the medical benefit (39% did so in 2016, and 22% plan to do this in 2017);
  • Implement coverage changes to influence site of care for specialty pharmacy through their medical benefit (19%, 17%);
  • Establish different copays for specialty drugs to promote use of biosimilars (18%, 8%); and
  • Eliminate subsidy or don’t cover specialty pharmacy through retails (25%, 8%).

Other top priorities for employers include:

  • Evaluate overall health program design value and subsidy levels (81%);
  • Increase participant engagement in health and well-being (81%);
  • Identify and effectively manage population health risks (71%);
  • Evaluate vendor partnerships to determine the entities best-positioned to help deliver on the company’s strategy (68%);
  • Access health care delivery and networking strategy to maximize the purchasing value of health care services (63%); and
  • Evaluate spousal and dependent subsidies and their participation in the health program (53%).

Willis Towers Watson says, “As the majority of employers become much more aggressive about strategies to control costs and improve program effectiveness, a number of emerging trends continue to evolve in the above areas that make up the Willis Towers Watson framework for best practices for a high-performing health plan.”