Study Identifies Cancer, Cardiovascular Disease as Top Drivers of Employer Health Care Costs

More employers report cancer as the top driver of health care costs in large companies, according to the 2023 Large Employers’ Health Care Strategy and Plan Design Survey, administered by the Business Group on Health.

Cancer, cardiovascular disease, and musculoskeletal conditions have peaked as the top 3 conditions driving health care costs for 2 years in a row in the survey. However, employers reported a 13% increase in late-stage cancers and approximately 44% predict a similar increase in the future because of delayed screenings caused by the COVID-19 pandemic.

“Survey findings function as a ‘collective snapshot’ that can guide employers as they determine how to maximize employee benefits,” said Ellen Kelsay, president, and CEO of Business Group on Health, in a press release.

Employers are concerned beyond their own costs, according to the survey, including concerns about health equity and affordable health care. Employers claim that they will invest in health and well-being offerings for employees.

Between May 31, 2022, and July 13, 2022, the researchers administered the survey to 135 large companies, who share a total of more than 18 million employees. The survey aggregated employer-sponsored health care data, including costs and health care plan design, for 2023.

Employers’ major areas of concern included:

• Rising costs. In 2021, actual health care costs rose an average of 8.2%, following no increase in costs from 2019 to 2020.
• Costly employee coverage. According to the survey, large employers expected to cover 82% of the cost of employee coverage this year, which increased from 80% last year. Employers are looking for long-term cost shifts, such as targeting unsustainable health care expenses and costs for prescription drugs.
• Prescription drug trend. Among large employers, a staggering 99% admitted some level of concern about this—in 2021, prescription drugs were 21% of employer health care costs, with more than 50% of drugs including specialty medications.
• Long-term mental health issues. Survey responses showed that 44% of large employers are currently seeing long term mental health issues resulting from the pandemic, with nearly the same percentage of large employers identifying it as a future health care issue. Consequently, 85% of large employers reported that they will maintain pandemic-related mental health benefits and coverage charges.
• Policy to lower health care and prescription drug costs—Particularly for new gene therapies and affordable daily medications. Almost one-quarter of employers are invested in low- to no-cost virtual health.
• Integrating virtual health. Among employers, almost 84% said that hybrid virtual health care and in-person is critical for success, and more than 30% will offer virtual primary care services in 2023.
• Health and well-being strategy. The survey showed that 65% of employers say health and wellness are integral to the workforce. They noticed it was an important factor to retain staff, support overall employee well-being, and impact business performance and culture.
• Health equity. Nearly 75% of employers indicated that they believe in health equity, planning to address racism, childcare, transportation, and food access/insecurity by 2025. The retraction of Roe v. Wade forprotected abortion has continued to concern employers.

Kelsay and team found that employers could create “a more positive and sustainable health care experience, among other issues,” because of these findings.

Reference

Business Group on Health. Cancer Now Top Driver of Employer Health Care Costs, Says Business Group’s 2023 Health Care Strategy and Plan Design Survey. News Release. August 23, 2022. Accessed on August 23, 2022.