Employers expect another significant hike in healthcare costs as they look ahead to next year.
"Employers are anticipating another 7 percent increase in healthcare costs for 2024," said Julie Stich, vice president of content for the International Foundation of Employee Benefit Plans. "Plan sponsors have indicated that chronic health conditions have a considerable effect on their medical expenses. That ties to the data that disease management and wellness programs rank high in cost-management strategies."
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The foundation's latest survey found that the expected increase is in line with this year's rise in costs. According to survey respondents, the top four contributors to higher costs are:
- Utilization because of chronic health conditions, up 22% (higher increase than last year)
- Catastrophic claims, up 19% (same as last year)
- Specialty or costly prescription drugs or cell and gene therapy, up 16% (higher than last year)
- Medical provider costs, up 14% (higher than last year)
One notable change from last year is increased utilization because of delayed preventative or elective care during the pandemic, which declined from 12 percent to 4 percent.
Survey respondents said they are taking steps to mitigate the higher costs. "In response to rising specialty prescription drug prices, employers are focusing on utilization strategies like case management to guide medication adherence and management of side effects," Stich said.
When asked what initiatives would make the most impact on managing costs for 2024, there were notable differences from survey data collected last year. Employers plan to implement the following strategies to manage expenses in the coming plan year:
- Utilization control initiatives, such as prior authorization, case management, disease management, and nurse advice lines, 22% (up from last year).
- Cost-sharing initiatives, including deductibles, coinsurance, copays, and premium contributions, 16% (down from last year).
- Work and wellness programs, 13% (new standalone response option this year)
- Plan design initiatives such as dependent eligibility audits, high-deductible health plans (HDHPs), spousal surcharges and carve-outs, and formulary changes, 12% (same as last year).
- Purchasing and provider initiatives, including telemedicine, price transparency tools, centers of excellence, healthcare navigators and advocates, coalitions, and quality initiatives, 12% (down from last year).
From: BenefitsPRO
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Alan Goforth
Alan Goforth is a freelance writer in suburban Kansas City. In addition to freelancing for several publications, he has written a dozen books about sports and other topics.
