Mercer Leaders Weigh In on 2019 Health Benefit Trends

Part 2 of our predictions for the future of healthcare

By Mercer

Photo by NordWood Themes on Unsplash

Jack Welch famously said, “Change before you have to.” That’s a tall order for a system as complex as US healthcare, where many areas seem long overdue for change. But even as new challenges add to existing ones, there are bright spots where progress is being made. Last week we posted 10 predictions from Mercer thought leaders on what’s changing for employer health plans in 2019. Here are 10 more.

Moderate cost growth allows longer-term focus. Health benefit cost trends are looking stable heading into 2019, with employers predicting average cost growth of about 4%, similar to 2018’s actual cost increase of 3.6%, according to Mercer’s National Survey of Employer-Sponsored Health Plans. In a tight labor market, many employers will take advantage of this relative calm to focus on employee needs and longer-term cost management initiatives. The survey asked employers to identify their top strategies for the next five years. The strategy that moved up to second place in 2018? “Focused actions to create a culture of health.” It’s now just a hair behind employers’ number one priority: “Managing high-cost claims.”

Beth Umland — Health & Benefits Research

Big things for behavioral health Change is happening in the behavioral health care delivery system. While there are many gaps in today’s delivery system, better access and better quality will be a point of focus in 2019. We’ll see growing investment in technology and AI; more partnerships between traditional medical and behavioral health carriers on smaller, targeted point solutions; and creative network strategies to combat out-of-network utilization and costs. Underscoring all of the strategies and tactics will be an increase in the number of organizations that step forward, with their leadership front and center, to commit to improving the conversation around, and services for, behavioral health.

Sandra Kuhn — National Lead for Behavioral Health Consulting

Specialty drugs will command attention. The specialty therapy market is continuing to grow rapidly, with many new and more effective therapies likely to come to market over the next 5 years — new biologics, gene therapy, personalized cancer treatments, proton beam therapy, and more. The financial impact will be large and employers will have to make some very serious decisions about funding. As costly as these therapies have been in the past, we are approaching a tipping point that will challenge the financial viability of many employer health plans. In 2019, we will see movement to anticipate and plan for these costly developments.
 
 Jeff Dobro, MD, Strategy & Clinical Services Leader

Rx management gets yet more complicated. PBMs, carriers, pharma companies, and wholesalers will continue to face intense scrutiny regarding profits, delivery models and alignment (or lack of alignment) with plan sponsor goals. ESI and CVS have already reshaped themselves in response and employers will now start to decipher these new delivery models and determine their value. Additionally, PBMs will introduce new “flex” formularies designed to allow plan sponsors to take advantage of pharmacy company pricing practices (now favoring low list price drugs over “rebate chasers”). The other wild card is the impact of newly vertically integrated organizations on market dynamics. Will they take market share? Will they make it hard to carve out? Will they agree to total cost of care guarantees if they manage both medical and Rx?

David Dross –National Practice Leader, Managed Pharmacy Practice

Congress gets stuff done…? It’s hard to predict what will happen in Washington DC in 2019 with a split Congress — Democratic majority in the House and Republican majority in the Senate. There are some issues that the parties might be able to work on together and pass legislation for, such as surprise medical bills, pharmaceutical costs, and HSA expansion. Full repeal of the Cadillac tax is more of a wish than a prediction; we may have to settle for additional delays.

Tracy Watts, US Health Reform Leader

Disruption of business as usual. With the economy expected to slow after a record expansion, employers will take bolder action to manage health care cost. Supply side solutions, such as network alternatives, will become more common as employers become more accepting of provider disruption to achieve targeted cost reductions and/or improve outcomes. They will continue to look for ways to collectively address health system challenges and counter the increasing leverage of providers and health plans resulting from ongoing consolidation.

Sunit Patel — Chief ActuarThe issue of bill coding will surface. As doctors and hospitals become health systems, they are hiring coding experts at an increasingly rapid rate as a means of maximizing reimbursements. For employer plan sponsors, bill coding practices can more than negate negotiated discounts on procedures or admissions. 2019 may be the year that the payer community — health plans, employers and their advisors — start to meaningfully engage providers on this serious issue.

Rich Fuerstenberg — Center for Health Innovation

Voluntary benefits get personal. As consumer expectations continue to evolve, employees will depend even more on their employers for advice and help in understanding how to best leverage their benefits to address their specific needs. Benefits offerings will become more and more personal, with targeted education to help employees on a “need to know” basis. Employers will utilize more data-driven approaches to tailor their information and guidance, all wrapped in an engaging employee experience.

Tim Weber — Voluntary Benefits Leader

Employers seek simplicity. Employers are looking to simplify the employee experience and HR vendor management through consolidation of solutions. That could look like more AI, more subcontractor relationships, or fewer vendors. It could also lead to less siloed HR teams, as a means to greater integration and efficiency.

Kristin Parker — Total Health Management

Read the original Part 1 of this article, as well as the original Part 2.