Employers are facing rising health care costs while also striving to provide competitive and inclusive benefits to support employee well-being. To address this issue, some employers are increasing their plan contributions as a temporary solution. However, as health care costs continue to rise, sustaining this approach will become increasingly difficult. Employers are now exploring alternative strategies to manage costs without burdening employees. As HR leaders plan for 2024, implementing long-term cost management strategies will be crucial in minimizing cost increases for employees.
Employers are considering employee value to address rising costs
Since employers are offering competitive, attractive, and inclusive benefits to support employee well-being, they must also prepare for faster health cost growth for years to come. Pursuing cost management strategies that can slow cost growth over the longer term and minimize cost increases for employees will be key for 2024 planning. For example, some companies are offering wellness programs that incentivize employees to adopt healthy behaviors, such as regular exercise and healthy eating. These programs not only promote employee well-being but also help reduce the risk of chronic conditions like cardiovascular disease and diabetes, which are major drivers of health care costs.
Employers attribute cost increases to specific health conditions
1 in 2 employers report that cancer is the number one driver of health care costs. In addition, musculoskeletal issues, cardiovascular disease, and diabetes are the other health conditions that employees see as key cost drivers within their plans. Implementation of disease management programs provides personalized support and resources to employees with chronic conditions, helping them better manage their health and prevent costly complications. By proactively addressing these conditions, employers can reduce the need for expensive treatments and hospitalizations, ultimately lowering health care costs. By optimizing spending under these conditions, employers can work to stabilize their overall increases in health care payments.
Cost advantages of virtual healthcare
Telemedicine is also emerging as a cost advantage for employers. For instance, an internal study by Penn Medicine showed that telemedicine reduced its employees’ health costs by 25%. This virtual care option allows employees to consult with healthcare professionals remotely, eliminating the need for in-person visits and reducing associated costs. Additionally, telemedicine can lead to indirect cost savings for patients, such as travel expenses and missed work.
Employers are taking proactive steps to address rising health care costs and provide competitive and inclusive benefits. By implementing long-term cost management strategies, optimizing spending in key areas, and leveraging innovative solutions like telemedicine, employers can navigate the challenges of rising costs while ensuring the well-being of their employees.
For more information about health care costs and benefits trends, view our 2024 trends flyer.
