As they face financial pressures, employers are increasingly prioritizing health equity initiatives.

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In the face of rising health care costs, a new survey shows that 74 percent of employers are facing the impact on wages and employee benefits, with many anticipating an additional cost shift to the workforce.¹ As they navigate these financial pressures, employers are increasingly prioritizing health equity initiatives and innovative strategies to manage high-cost claims, reflecting a critical shift in how organizations approach employee health and wellness in 2024 .

National Alliance of Healthcare Buyer Coalitions published findings from the Pulse of the Purchaser 2024 survey, conducted between September and October 2024. The survey provides a comprehensive overview of employer perspectives on health care costs, health equity and strategies for managing high-cost claims. With responses from 188 employers across the country, the report sheds light on the pressing concerns and innovative approaches being adopted in today’s healthcare landscape.

Rising health care costs and the impact on employees

One of the survey’s most significant findings is overwhelming concern about rising health care costs. Most employers find that rising health care costs often compromise salary or wage growth. This sentiment is echoed by 74% of respondents who agree that higher health care costs will further shift costs to employees. As one survey respondent noted, “It’s not just about controlling costs anymore; it’s about survival.”

Strategies to mitigate high cost claims

Employers are actively exploring various strategies in response to the challenges presented by high-cost claims. The survey highlights some key initiatives that employers are implementing or considering in the next 1 to 3 years:

• Reducing the Risk of Neonatal Intensive Care Unit (ICU) Claims: 55% of Employers Focus on Managed Maternity and Fertility Benefits to Mitigate the Risk of Neonatal Intensive Care Unit (ICU) Claims
• Improved screening and early detection: 45% prioritize improved screening measures to catch health problems early
• Redirecting site of care: 40% are considering redirecting care to more cost-effective settings, such as home infusion services

Commitment to health equity

The survey results also reveal a growing commitment among employers to address health equity. A remarkable 74% of employers are engaging different departments to discuss company strategies related to health equity, marking a 15% increase from 2023. This trend indicates a wider recognition of the importance of equitable access to health services.

Employers also look at health equity data through various lenses, including race/ethnicity, income levels, and geographic location. More than 60% of employers are currently reviewing or considering health claims based on these factors, demonstrating a commitment to understanding and addressing disparities in health care access and outcomes.

Employers want more PBM transparency

More than half of employers are considering changing their pharmacy benefit manager (PBM) in the next 1 to 3 years, with 52% of respondents weighing this option, while 48% have no plans to make a change. This potential shift highlights employers’ growing concerns about transparency, control, and alignment with organizational goals in PBM relationships. Key factors driving employers to reevaluate their PBMs include a desire for more transparent contract terms and pricing structures, and greater control over form choices and customization to meet the needs of their unique employee population.

Drug formularies were originally created by a pharmacy and therapy committee made up of clinicians and experts from PBMs, health plans, or other organizations.² The committee evaluated drugs based on safety, efficacy and clinical value, placing those that met these criteria on the formulary. Rarely has an FDA-approved drug that met these standards been excluded. Designed as a clinical tool, this process established consistency and confidence in the management of forms. However, many argue that this is no longer the case.

“Today’s drug formularies are a financial tool tied directly to drug rebates and have little or no alignment with clinical support,” wrote Jan E. Berger, MD, MJ in Population health, equity and outcomes^®. “In fact, they are often in direct conflict with the goal of a patient receiving the drug that will help them the most. What started as a tool has now become a weapon.”

Several employers in the survey also expressed frustration with perceived conflicts of interest within their current PBM arrangements, which they believe compromise the ability to make objective, organization-focused decisions.¹ The sentiment among some respondents underscores a strong belief that they need to take a more hands-on role in day-to-day oversight of prescription drug use, access and claims management. Additionally, the complexity and opacity of current PBM operations has left some employers questioning whether their PBMs are making the best decisions for their organizations. To comply with fiduciary obligations, many employers are now actively reevaluating their PBM contracts, reflecting a trend toward a more accountable and transparent approach to pharmacy benefit management.

Aiming at cost management solutions

In response to rising health care costs, the Pulse of the Purchaser 2024 survey highlights a significant shift among employers toward prioritizing health equity and cost management strategies, even though these changes may impact employee wages and benefits. Many employers are taking proactive steps to manage high-cost claims and exploring alternative care options. They also advocate for increased transparency and control in PBMs. The survey indicates that 74% of employers recognize the importance of equitable access to care and more than half are considering changes to PBM practices to improve alignment and transparency. The findings reflect a growing commitment to adapt health care strategies that support both employee well-being and organizational sustainability.

reference

1. Buyer’s Pulse 2024 survey results. National Alliance of Healthcare Buyer Coalitions. Published October 29, 2024. https://www.nationalalliancehealth.org/resources/pulse-of-the-purchaser-2024-survey-results/

2. Berger J. The need for regulation to positively impact drug formulation decisions to ensure adequate patient access: an under-discussed topic in the pharmaceutical policy and pricing debate. Population health, equity and outcomes. 30 October 2024. Accessed 30 October 2024.