ROLLING
MEADOWS, Ill., July 30,
2024 /PRNewswire/ -- Only about half of US employers
(52%) say they effectively manage healthcare costs, according to
Gallagher's 2024 US Physical & Emotional Wellbeing
Report. Several factors appear to contribute to the perception,
including the fact that nearly all organizations (92%) experienced
health plan premium increases during their most recent renewal. And
of those, nearly 1 in 4 (24%) experienced double-digit increases.
The Gallagher report, which gathered insights from 3,552
organizations, was developed to help employers optimize their
investments in the physical and emotional wellbeing of their
workforce.
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Employers ranked the high costs of medical services (68%) and
specialty drugs (44%) as their top two healthcare cost management
challenges. Within the specialty drug segment, decision-makers are
examining whether GLP-1s and other weight loss medications are
worth the high prices. Increasingly, they're putting in utilization
management, including prior authorization, and tying coverage to
ongoing participation in a weight management program — a tactic
used by 52%.
"The advantages of new treatments for obesity and excess weight
are evident, but the significant cost associated with these
medications cannot be ignored," said William F. Ziebell, CEO of Gallagher's Benefits
& HR Consulting Division. "Employers that successfully navigate
this challenge tend to take a mindful approach to their benefits
design. For example, they may require an employee clear a body mass
index threshold and actively participate in an employer-sponsored
wellbeing program before they cover GLP-1 prescription costs. A
holistic strategy, such as this, will likely result in better
outcomes, as well as improved employee engagement."
Leveraging different tactics to share costs and improve
benefits utilization.
While a silver bullet to reverse the trend of rising healthcare
costs doesn't exist, many employers are making progress with
different tactics to help employees better utilize and appreciate
their benefit offerings.
Choice is one example. The majority of employers (80%) offer
more than one medical plan. Consumer-directed health plans
(CDHPs) with health savings accounts (HSAs) are among the fastest
growing plan type. Now offered by 56%, an increase of 16 points
from 2020, they're also attracting greater employee interest.
Almost a quarter of these organizations (24%) enroll more employees
in their CDHP with an HSA than any other plan.
While not as prevalent as CDHPs, some employers are trialing
value-based tactics as a way to offer the highest-quality care at
the lowest possible cost. Nearly 1 in 5 (17%) reduce employee costs
for prescription drugs that treat chronic conditions. Other
employers (14%) reduce employee costs for using designated centers
of excellence for specific medical procedures. Employees may be
incentivized through lower out-of-pocket costs, travel
accommodations to the site of care, or both.
Stress, burnout, and mental health are areas of concern, but
questions remain about whether leaders are equipped help their
employees.
Most employers (70%) noted concerns about the impact of stress
and burnout on their employees. However, only about 2 in 5 (42%)
think their managers are well-equipped to refer employees to mental
health support services. Recognizing this, 22% of organizations now
offer training for HR and managers to navigate these situations,
which is a 5-point increase since 2022. By equipping leaders with
the right knowledge, they can offer timely support through
appropriate resources or referrals, helping to lower the potential
impact on overall wellbeing, performance, and productivity.
In addition to training, technology is also playing a role in
mental health support. Many employers are adopting workplace
collaboration software to increase social connection. The objective
of these digital tools is to promote a positive culture by
recognizing employees, addressing health challenges, and providing
virtual access to peer support groups.
"It's important for decision-makers to understand the diverse
needs of their workforce and use this as a guide to create a
benefits offering that will appeal to them," said Ziebell. "Where
many employers fall short is by failing to communicate when and how
to use specific benefits, and their value. By ensuring that
employees are well-informed and equipped with the necessary
information to utilize their available benefits, employers can
improve employee engagement and bolster retention."
ABOUT THE US PHYSICAL & EMOTIONAL WELLBEING
REPORT
Gallagher's 2024 US Physical & Emotional
Wellbeing Report is part of the Workforce Trends Report Series,
covering medical benefits, pharmacy benefit management, wellbeing
initiatives, and absence management. It presents recent findings on
current and emerging trends to help employers optimize their
investments in physical and emotional wellbeing. Upcoming reports
in the series will each center on a different aspect of wellbeing.
Data and insights are compiled from a variety of Gallagher
benchmarking surveys conducted each year. In this report, they're
based on the results of the US Benefits Strategy & Benchmarking
Survey, gathered from January to March
2024. A total of 3,552 organizations across the US
participated. Findings are broken out by region, organization size,
and ownership structure for peer comparison.
ABOUT GALLAGHER
Arthur J.
Gallagher & Co. (NYSE:AJG), a global insurance
brokerage, risk management and consulting services firm, is
headquartered in Rolling Meadows,
Illinois. Gallagher provides these services in approximately
130 countries around the world through its owned operations and a
network of correspondent brokers and consultants.
Contact:
Mary Schwartz, Gallagher
847.378.5893
mary_schwartz@ajg.com
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