health care benefit trends - gccba program materials...pregnancy) neonatal care bariatric surgery...

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H E A L T H W E A L T H C A R E E R

H E A L T H C A R E B E N E F I TT R E N D S

GREATER CINCINNATICOMPENSATION & BENEFITSASSOCIATION

JUNE 2, 2016

1Mercer’s National Survey of Employer-Sponsored Health Plans 2015

T H E Y E A R ’ S T O P S T O R I E S

Mercer’s National Survey of Employer-Sponsored Health Plans

Analysis: 25 strategies thathelped employers achieve lowercost and trend in 2015Successful practices spannedprogram design, care delivery,workforce health

3Private exchanges will be usedby 6% of large employers for 2017open enrollment, with rapid growthexpected to continue through 2020Employers seek to add choice, easeadministration, manage cost, and moreeasily transition to CDHPs

6

Cost growth moderate, at 3.8%in 2015 with 4.3% projected for 2016But while large employers heldincrease to 2.9%, small employerssaw cost rise 5.9%

1

One in four coveredemployees is now in a CDHPConsumerism tools are helpingemployees make the best plan choice.

2

Consumer empowerment isbuilding, supported by newprograms and technologyTelemedicine, cost transparencytools and mobile devices are allon the rise.

4

New clinical models—ACOsand medical homes—lead theevolution to value-based careCenters of Excellence andnarrow networks are first stepsfor some employers

5


A B O U T M E R C E R ’ S N A T I O N A L S U R V E Y O FE M P L O Y E R - S P O N S O R E D H E A L T H P L A N S

Employer size groups in presentationSmall: 10-499 employees/Large: 500+ employees/Jumbo: 20,000+ employees

OldestMarking 30 years of measuring health plan trends

Largest2,486 employers participated in 2015

Most comprehensiveExtensive questionnaire covers a full range of health benefit issues and strategies

Statistically validBased on a probability sample of private and public employers for reliable results

Includes employers of all sizes, all industries, all regionsResults project to all US employers with 10 or more employees

3© MERCER 2015 3

COST TRENDS


C O S T S R O S E M O D E R AT E LY I N 2 0 1 5 , W I T H A S I M I L A RI N C R E A S E P R E D I C T E D F O R 2 0 1 6

Change in total health benefit cost per employee compared to CPI & workers’ earnings

8.0%

-1.1%

2.1%2.5%

0.2%

6.1%7.3%

8.1%

11.2%

14.7%

10.1%

7.5%

6.1% 6.1%6.1%6.3%5.5%

6.9%6.1%

4.1%

2.1%

3.9%3.8%4.3%*

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Annual change in total health benefitcost per employee Workers' earnings

Overall inflation

* ProjectedSource: Mercer’s National Survey of Employer-Sponsored Health Plans; Bureau of Labor Statistics, Consumer Price Index, U.S. City Average of Annual Inflation(April to April) 1993-2015; Bureau of Labor Statistics, Seasonally Adjusted Data from the Current Employment Statistics Survey (April to April) 1993-2015.


S H A R P E R I N C R E A S E B U T L O W E R P E R - E M P L O Y E E C O S TF O R S M A L L E M P L O Y E R S

Average total health benefit cost per employee in 2015

$11,635 $11,012$11,973

All employers Employers with 10-499employees

Employers with 500 or moreemployees

+3.8% +5.9%+2.9%

Cincinnati/Dayton:$12,211 (+3.9%)

6MERCER’S NATIONAL SURVEY OF EMPLOYER-SPONSORED HEALTH PLANS

$9,668$11,388 $11,892 $11,951 $12,054 $12,390 $13,383

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

A V E R A G E C O S T B Y I N D U S T R Y

Large employers


$11,209 $11,513$12,762 $12,893

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

South Midwest West Northeast

A V E R A G E C O S T B Y R E G I O N

Large employers


11.5%

9.9%9.3%

7.6% 7.6%6.3%

5.1% 5.2% 5.5% 5.4%

8.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Cost of specialty drugs grewby 22% in 2015 among employersthat could report cost separately (49%)

P R E S C R I P T I O N D R U G S A R E B E C O M I N G A M A J O R C O S TD R I V E R

Cost change for prescription drug benefits in primary medical plan for large employers


$714

$843

$755

$981

$805

$704

$894

$735

$992

$81620152014

Midwest / -2.6%

All large employers / +1.4%

D E N T A L C O S T B E N C H M A R K S

Large dental plan sponsors

Northeast / +6.0%

South / -1.4%

West / +1.1%

Cincinnati/Dayton:$721 in 2015,$718 in 2014

(+0.4%)

10© MERCER 2015 10

D E S I G N &CONTRIBUT ION TRE NDS


E V O L U T I O N O F M E D I C A L P L A N O F F E R I N G S , 2 0 0 8 - 2 0 1 5

Large employers

93% 93% 94% 92% 90% 90% 88% 84%

37%43%

35% 36%

34% 31% 33% 34%

20% 20% 23%32%

36% 39%48%

59%

0%10%20%30%40%50%60%70%80%90%

100%

2008 2009 2010 2011 2012 2013 2014 2015

PPO/POS HMO CDHP

Cincinnati/Dayton: 88% PPO / 73% CDHP / 31% HMO


M A J O R I T Y O F L A R G E E M P L O Y E R S E X P E C T T OO F F E R A C D H P B Y 2 0 1 8 – B U T M O S T S E E I T A S A NO P T I O N , R A T H E R T H A N A F U L L R E P L A C E M E N T

17%22%

61%

21%

55%

25%25%

61%

15%

Small employers (10-499 employees)

Large employers (500+ employees)

Jumbo employers (20,000+ employees)

Will offer CDHP along withother medical plan option(s)

Will not offer CDHPWill offer CDHP as theonly plan to all or most

employees within the nextthree years


E M P L O Y E R S S A V E W I T H H S A - B A S E D C D H P s :A V E R A G E C O S T W A S M O R E T H A N 2 0 % L O W E R T H A NF O R E I T H E R P P O s O R H M O s I N 2 0 1 5

Medical plan cost per employee (includes employer contributions to HSA accounts)among large employers

$11,609

$9,921

$12,056

$9,215

PPO PPO with deductibleof $1,000 or more

HMO HSA-eligible CDHP


P H A R M A C Y B E N E F I T D E S I G N T R E N D S

Cost-sharing provisions used in large employers’ primary plan

COST-SHARING STRUCTURE

Same level of cost-sharing for all drugs 7% 8%

Two levels (generic / brand) 10% 11%

Three levels (generic / formulary / non-formulary) 57% 59%

Four or more levels 22% 19%

Other 4% 2%

RETAIL MAIL-ORDER


31%

16%

40%

47%

79%

13%

14%

18%

32%

55%

Employers with 500+ employees

Employers with 20,000+ employees

Step therapy

Mandatory generics with or without physician override

P H A R M A C Y C O S T - M A N A G E M E N T T E C H N I Q U E S

Mandatory mail order (after 2-4 retail fills)

Retail penalty program

Mandatory drug exclusions


S O M E G R O W T H I N U S E O F S P O U S A L S U R C H A R G E S , B U TN O T I N E X C L U S I O N S

7%9%9% 9%8%

12%

201320142015

Employers with 500or more employees

Spouses withother coverageare not eligible

Spouses with othercoverage must pay

surcharge

3%

20%

5%

27%

5%

26%

201320142015

Spouses withother coverageare not eligible

Spouses with othercoverage must pay

surcharge

Employers with 20,000 ormore employees

Median monthlysurcharge: $100

Median monthlysurcharge: $100

Mercer’s National Survey of Employer-Sponsored Health Plans

Cincinnati/Dayton: 19% exclusion / 27% surcharge


A V E R A G E E M P L O Y E E C O N T R I B U T I O N S B Y C O V E R A G ET Y P E

Large employers

HSA-eligible CDHPEmployee-only 11% $85 $82 20% 17%Family 4% $338 $252 27% 18%

HRA-based CDHPEmployee-only 13% $82 N/A 19% N/AFamily 2% $313 N/A 25% N/A

PPOEmployee-only 7% $130 $112 24% 20%Family 3% $472 $312 32% 20%

HMOEmployee-only 11% $127 N/A 23% N/A

Family 5% $476 N/A 32% N/A

NO CONTRIBUTIONREQUIRED

AVERAGE MONTHLYDOLLAR AMOUNT

AVERAGECONTRIBUTION AS

% OF PREMIUM

Cincinnati/Dayton figures in orange


E M P L O Y E R S U S I N G V O L U N T A R Y B E N E F I T S T O F I L L G A P SI N C O R E B E N E F I T S

Objectives for program, based on large employers offering VBs

18%

26%

55%

55%

67%

74%

To accommodate employee requests

To help employees reduce financial stress / improve financial health

To give employees opportunity to fill gaps in employer-paid benefits

To offer additional benefits at no cost to employer

To maintain employee benefit options as core benefits change

To help drive participation in lower-cost plans

76% of employerswith voluntary

benefits say theirobjectives have

been met


VOLUNTARY BENEFITS

Individual disability 61%

Accident 59%

Cancer / critical illness 45%

Whole / universal life 43%

Legal benefit 30%

Discount purchase program 26%

Long-term care 25%

Hospital indemnity 21%

Auto / Homeowners 20%

Investment advisory 19%

Telemedicine 18%

ID theft 17%

Pet insurance 10%

E X P A N D I N G E M P L O Y E E S ’ V I E W O F T H E W H O L EB E N E F I T P A C K A G E

Meeting diverse needs without driving up employer costsP

erce

ntof

larg

eem

ploy

ers

offe

ring

the

bene

fit

20© MERCER 2015 20

CARE DELIVERYTRENDS


U S E O F A C C O U N T A B L E C A R E O R G A N I Z A T I O N S ( A C O s )I S R I S I N G , B U T C O S T I M P A C T N O T C L E A R T O M O S T

10% 10%13%

29%25%

33% 34%

43%

2013 2014 2015 Considering

All large employers

Employers with 20,000+employees

Among employers currently offering ACOs*:

• 80% offer the ACO through their health plan (as a standard offering)rather than through a direct contract.

• 28% actively encourage members to seek care from the ACO.

• 16% report some cost savings achieved with the ACO; most can’tmeasure.

*Preliminary results from supplemental survey of employers with 5,000 or more employees


76%

39%

18% 17%

51%

31%

14%

27%19%

26% 23%

34%

Transplants Cancer Women's health(infertility,

pregnancy)

Neonatal care Bariatric Surgery otherthan transplants

Currently use

Considering

T Y P E S O F C O E s C U R R E N T L Y U S E D O R B E I N GC O N S I D E R E D

Among employers with 5,000+ employees offering COEs*:

• 79% say they are likely to expand COE use in the future



M E D I C A L H O M E S G R O W I N G M O R E S L O W L Y , B U T T H EL A R G E S T E M P L O Y E R S S H O W S T R O N G I N T E R E S T

5%7% 7%

17%

13%

20% 21%

30%


All large employers


Among employers with 5,000+ employees offering patient-centered medical homes*:

• 33% actively encourage members to seek care from amedical home.

• 81% report that the amount of savings achieved from usingmedical homes is not known.



O N S I T E O R N E A R - S I T E C L I N I C P R E V A L E N C E

Large employers

CONSIDERINGFOR 2015 OR 2016

41%

34%

28%

15%13%

17%21%

37%

28%

20%

8% 9%13% 12%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Health care Government Manufacturing Transport/Comm/ Utility

Services Wholesale/Retail

Financialservices

Occupational health services

Primary care services


C O S T T R A N S P A R E N C Y T O O L S

Percentage of employers that contract with a specialty vendor outside the health plan toprovide transparency tool

12%

15%13%

15%

24%22%

2014 2015 Considering

All large employers


Among large employers who provide transparency tools:

• 13% provide incentives to encourage employees to use them.

• 27% track utilization. Of those, about 1 in 5 report utilization of20% or more, but nearly half report utilization of less than 5%.


S T R O N G I N T E R E S T I N R E F E R E N C E - B A S E D P R I C I N GA M O N G T H E L A R G E S T E M P L O Y E R S

10% 11%13%

18%

12%15% 15%

29%


All large employers

Employers with 20,000+employeesReference-based pricing addresses the

broad variation in prices for health careservices within a given market.


T E L E M E D I C I N E I S T H E F A S T E S T G R O W I N GT R E N D I N C A R E D E L I V E R Y

11%

18%

30%35%

18%

34%

44% 44%


All large employers


Among large employers offering telemedicine:

• 26% reported a utilization rate of 5% or higher in 2014.

• 47% agree that the telemedicine program has met their objectives.

• 85% say that the most important reason for offering telemedicine is toprovide employees with a more affordable, convenient source of care.


P R I V A T E H E A L T H B E N E F I T E X C H A N G E S G A I N AF O O T H O L D A S I N T E R E S T C O N T I N U E S T O B U I L D

Large employers

4% 4%

13%

6%8%

15%

27%24%

17%

For active employees For pre-Medicare-eligibleretirees*

For Medicare-eligible retirees*

Use nowUse now / planned for 2017Considering using within 5 years

* Among current retiree medical plan sponsors


H E A L T H A D V O C A C Y I S I N C R E A S I N G L Y R E C O G N I Z E DA S A C R I T I C A L R E S O U R C E I N A C O M P L E X H E A L T HC A R E S Y S T E M

Percent of large employers offering program

79%68%

40%32%

0%

52%

80%77%71%

36% 39% 42%

56%

83%

2014 2015

Phone/webhealth

coaching

Face-to-facehealth

coaching

Sleepdisorder

treatment

Resiliency/stressmanagement

program

Diseasemanagement

Healthadvocate

Healthassessment

NA

Addressing the continuum of health needs


E M P L O Y E E PA R T I C I PAT I O N R AT E S F O R H E A LT HM A N A G E M E N T P R O G R A M S S T R U G G L E T O B R E A K 5 0 %

Large employers offering programs

44%38%

13%

48%52%

20%26%

22%

13%

0%

10%

20%

30%

40%

50%

60%

Health Assessment Biometric screening(validated)

Lifestyle managementprogram*

All employers offering program

Employers offering incentives

Employers not offering incentives

*Percent of identified persons actively engaged in program


E M P L O Y E R S A R E E X P L O R I N G N E W T E C H N O L O G I E S A N DA C T I V I T I E S T O I M P R O V E T H E M E M B E R E X P E R I E N C E

A C T I V I T I E S

All largeemployers

Employerswith 20,000+employees

Worksite biometricscreening event 56% 71%

Business unit/locationgroup challenges 45% 57%

Onsite exercise or yogaclasses or weight lossprograms (such asWeight Watchers)

43% 76%

Personal challenges 40% 55%

Peer-to-peer support 19% 33%

T E C H N O L O G Y - B A S E DR E S O U R C E S

All largeemployers

Employerswith 20,000+employees

Mobile apps 30% 44%

Wearables / apps tomonitor activity 24% 38%

Devices to transmithealth measures toproviders

4% 11%

Onsite kiosks 7% 12%

Other web-basedresources/tools 40% 63%

34

M E R C E R L A B S

Evaluate emerging trends andsolutions

Identify leading vendors

Develop perspective on best-in-class approaches and

differentiators

Help our clients navigate a rapidlychanging landscape

Partner with innovative companiesto bring unique solutions to our

clients

36

Smok

ing

Advocacy

E X P L O S I O N O F T E C H N O L O G Y A N D D ATA

Employer-Sponsored/Exchange

Communications

Incentives/Challenges

Navigation

M E M B E R

Assessments/Testing

Broad

Centers

ofExcellence


E X P L O S I O N O F T E C H N O L O G Y A N D D ATA


W H AT ’ S W O R K I N G T O H O L D D O W N C O S T ?

RESPONDENTS’ COSTS WERE ANALYZED BASED ON THEIR USE OF MORE THAN 25 COST-MANAGEMENT BEST PRACTICES

Plan design and delivery infrastructure

• Contribution for family coverage inprimary plan is 20%+ of premium

• PPO in-network deductible is $500+

• Offer CDHP

• HSA sponsor makes a contribution toemployees’ accounts

• Voluntary benefits integrated with core

• Mandatory generics or other Rxstrategies

• Steer members to specialtypharmacy for specialty drugs

• Reference-based pricing

• Data warehousing

• Collective purchasing of medical or Rxbenefits

• Transparency tool provided by specialtyvendor and/or used by 10% of members

• Use private health benefits exchange

Employee well-being

• Offer optional (paid) well-beingprograms through plan or vendor

• Provide opportunity to participate inpersonal/group health challenges

• Offer technology-based well-beingresources (apps, devices, web-based)

• Worksite biometric screening

• Encourage physical activity at work(gym, walking trails, standing desks,etc.)

• Use incentives for well-beingprograms

• Spouses and/or children mayparticipate in programs

• Smoker surcharge

• Offer EAP

Care delivery

• High-performance networks

• Surgical centers of excellence

• On-site clinic

• Telemedicine

• Value-based design

• Medical homes

• Accountable care organizations


E M P L O Y E R S U S I N G M O R E B E S T P R A C T I C E SE X P E R I E N C E B E T T E R C O S T R E S U LT S A N D L O W E RI N C R E A S E S

LARGE EMPLOYERS

Annual total health benefit costper employee in 2015

$11,346$11,892

Employers using morethan 16 best practices

Employers using fewerthan 7 best practices

Change in cost from2014 to 2015

2.9%

3.8%

*Analysis based on unweighted cost data from respondents providing cost for both 2014 and 2015.

health care benefit trends - gccba program materials...pregnancy) neonatal care bariatric surgery...

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