8/8/2018

HR Dive: Frustrated with Healthcare Costs, Large Employers Embrace ‘Activist’ Role

Large U.S. employers are increasingly willing to take steps to get more directly involved in the country’s healthcare delivery system, according to a new survey published by the National Business Group on Health (NBGH) Tuesday.

Nearly half of respondents (49%) indicated they are taking a more active role in changing healthcare delivery through a range of actions, including experimenting with new payment and delivery models like accountable care organizations (ACOs), centers of excellence and performance networks. The survey measured 170 large-employer NBGH members whose total covered populations number 19 million persons.

“As companies are taking this broader view of health and well-being, we are seeing employers playing an increasingly activist role in changing healthcare within the delivery system,” NBGH president and CEO Brian Marcotte said in a press briefing at the National Press Club in Washington, D.C., on Tuesday. “Actually, this is a higher number than we thought it would be.”

The survey’s release occurred just a day after The Wall Street Journal reported that yet another large employer, General Motors, announced plans to contract directly with Detroit-based Henry Ford Health System. The news is just one example of how employers can exert both their negotiating power and market influence, Kim Buckey, vice president of client services at DirectPath, said in an email to HR Dive.

“I think we will see more examples of this happening as employers become [increasingly] frustrated with payers,” Buckey said. “I’m already seeing a big uptick in articles expressing frustration with the current system, and questioning whether/how payers are truly working in their employer clients’ best interests.”

Over a third (35%) of employers surveyed indicated they would “actively pursue” an ACO or high-performance network (HPN) strategy in 2019, either by direct contracting or by promoting ACOs and HPNs offered by their health plans. A further 23% indicated that they were considering the arrangements for 2020-2021.

Shifts in consolidation, plan design

Employers in the survey also said that healthcare provider consolidation — most cases of which occur between hospitals and health systems, Marcotte explained — did not result in lower costs. “In fact, it often results in higher costs,” Marcotte said. NBGH said the cost to provide health benefits could near $15,000 per worker by the beginning of 2019 after apparently reaching the $14,000 per worker mark the organization had projected for 2018.

Over a quarter of employers in the survey (26%) are optimistic that various forms of consolidation, including that occurring between health plans and pharmacy benefits managers (PBMs) will have a positive impact. But the majority (56%) remain skeptical.

Read the article here.

(Ryan is the associate editor for HR Dive.)

2018 Medical Plan Trends and Observations Report
Report
2018 Medical Plan Trends and Observations Report
Download Report

SIGN UP FOR OUR NEWSLETTER