Improving Healthcare Affordability for Your Employees

Improving Healthcare Affordability for Your Employees
August 21, 2023 17 mins

Improving Healthcare Affordability for Your Employees

Improving Healthcare Affordability for Your Employees

As healthcare becomes more expensive, companies are searching for ways to keep costs down for their employees. Focusing on a few core areas can help.

Key Takeaways
  1. Access to primary care and pharmacies are key to preventative care, which in turn, lowers costs.
  2. Keeping mental health costs down for employees starts with company culture.
  3. Financial wellbeing has a direct impact on healthcare affordability and should not be overlooked.

Healthcare is expensive — and the costs just continue to rise worldwide. In the U.S., we expect increases for employer-sponsored health plans to be more than 8 percent in 2024. While ordinary macroeconomic inflationary pressures account for some of the increase, factors specific to healthcare are driving the trend. For example, the class of drugs known as GLP-1 receptor agonists, traditionally used for diabetes but now also used as weight loss aids, are projected to add as much as one percent to increasing costs alone, according to our estimates.

In the past, organizations have typically passed some of this cost on to their employees through plan design and contribution changes, but this is not sustainable. According to our research, nearly a third of employees already face difficulty accessing care due to cost. Almost half of all employees can’t afford to pay a $1,000 medical bill within 30 days — a number that rises to more than 60 percent for Hispanic employees and nearly 70 percent for black employees. As a result, employers and employees alike are searching for ways to keep costs down without foregoing necessary care. By focusing on a few core areas, employers can make an impact on affordability for their employees.

Primary Care

For some, primary care is the entry point to the healthcare system. Leveraging it can help improve affordability. However, many individuals lack convenient access to primary care, and as a result, their entry point to the system is the far less affordable option of emergency care. Aon’s research shows that 25 percent of employees live in areas with a significant shortage of primary care physicians (PCPs).

Primary care is also critical to preventative care, which can reduce the need for more extensive and costly care later. Even further, much of the necessary management for chronic conditions happens through primary care. So, access to primary care is in itself a driver of more affordable care and improved health outcomes.

Organizations that want to help their employees afford primary care can offer expanded access in a few ways:

  1. Offer virtual primary care, which has become much more common in recent years. The next iteration is virtual-first plans, which are separate plans that can reduce costs by coordinating all care through a virtual PCP.
  2. Enhance coverage with low employee coinsurance or copays for retail clinics and primary care office visits.
  3. Steer employees to high-quality, low-cost providers through personalized resources.
  4. Improve care coordination to help ensure services aren’t being unnecessarily duplicated and that the appropriate level of care is received.
  5. Assure health plan networks include providers who offer hybrid care (sometimes called “click and mortar”), which mixes virtual and in-person services.

Providing these expanded care options can deliver better outcomes and member experiences for employees.

Pharmacy

As a category for affordability, a pharmacy is like primary care in that it affects a large number of employees and benefits from early intervention. Similarly, access to pharmacies and an affordable member cost share can help with drug adherence, which, in turn, helps keep long-term treatment costs down. In trying to keep medications affordable, organizations can help their employees by:

90%

90 percent of companies either offered or planned to offer virtual primary care

2022 Health Survey | Aon

  1. Educating them to be better consumers by requesting generic medications where available or asking for a 90-day supply of medications. This can help with both adherence and cost, serving as a reminder that preventive drugs are covered from the first dollar by high deductible health plans.
  2. Implementing a consumer directed solution that steers members to the lowest cost, clinically appropriate drug.
  3. Leveraging manufacture assistance coupons to drive affordability for members and lower plan costs.
  4. Working with the pharmacy benefits manager or carrier to develop a biosimilar specialty drug strategy focused on driving cost down without compromising clinical outcomes.

65%

65 percent either offer or plan to offer low-cost primary care services (e.g., low copays, deductible waived, etc.) More than two-thirds of companies that rate their plans as highly effective offer these already.

2022 Health Survey | Aon

Mental Healthcare

Access to affordable mental healthcare is another important area for employers to address. People are suffering, and when they do, business outcomes suffer as well. That’s because people are the heart of an organization. While the rise in use of mental healthcare services predates the COVID-19 pandemic,1 it was greatly exacerbated by it. Our research shows that 47 percent of employees live in areas with limited access to mental health services. Helping to fix this is therefore a top priority for employers.

But beyond access to and affordability of treatment, organizations can play an even greater role in improving their employees’ mental health by focusing on prevention and early intervention.

78%

More than three quarters of employers offer or plan to offer pharmacy benefits designed to improve patient affordability of medications.

2022 Health Survey | Aon

Quote icon

Affordability and access are the tip of the iceberg. What’s beneath the surface is an organization’s culture.”

Elisha Engelen
Vice President, Health Solutions, North America

Addressing mental health and making it part of a company’s culture to hold people accountable can go a long way when creating a psychologically safe environment. Far too often, workplaces contribute to the detriment of their employees’ mental health — a bad manager, too much stress, and a negative company culture — all can take a toll. But by working to address employees’ mental health before they reach the crisis stage, organizations can reduce the need for such services.

That’s not to say that those services aren’t important. In order to make sure the organization is providing adequate mental health resources, here are a few things to consider:

  1. Do a gap analysis to determine if the plan achieves mental health parity. Plans that don’t address parity may hinder equitable access and create affordability barriers.
  2. Expand access to employee assistance programs, including increasing the number of sessions, offering training for managers to build emotional fitness, and leveraging critical incident stress debriefing to support those who might not ask for help otherwise, all while also reducing associated stigmas.
  3. Focus on early intervention. For example, an employee experiencing a stressful life change, like a divorce or a child’s serious medical diagnosis, may deal with the stress in an unhealthy way. For instance, abusing alcohol. Now, on top of the underlying stress, additional treatment is needed. If that employee was able to get help early on, it’s much more effective and less costly.
  4. Understand which employees are living in areas where there is a shortage of mental health providers and build strategies to address those in underserved areas with virtual options.
  5. Take interest in the whole person by engaging employees and their families in your strategies, along with local community events to reduce stigma and increase engagement.

Financial Wellbeing and Affordability

Companies have been focused on wellbeing initiatives in recent years, and financial wellbeing is an area that shouldn’t be overlooked. Just over half (54 percent)2 of employers incorporate financial wellbeing into their wellbeing strategy. Improving an employee’s overall financial wellbeing will help them afford the healthcare they need. Companies can directly help achieve this by:

  • Adding voluntary benefits, including company-paid benefits. Voluntary benefits can help personalize an organization’s offering to meet employee needs.
  • Considering pay-based plan designs and contribution structures.
  • Reducing total costs through value-led strategies, like vendor consolidation and reference-based pricing.

Keeping Healthcare Affordable is a Full-Time Strategy

Healthcare affordability isn’t a one-time event. It’s an ongoing strategy that organizations should commit to in order to help employees bring their best selves to work. This starts with understanding the healthcare affordability and access challenges within a population. Tools like Aon’s Health, Equity and Affordability Tool can help. By using data to optimize spend, companies can be more efficient and aware of programs with highly effective offerings. They can then use this as a guide in the evolution of their own programs to ultimately improve access and affordability for all.

1 What Is Driving Increased Spending on Mental Health Care Services?
2 2022-2023 Global Wellbeing Survey

Aon’s Thought Leaders

Janet Faircloth
Senior Vice President, Health Innovation Team, NA

Michael Manolakis
Senior Vice President, Pharmacy, NA

Patti Wahl
Senior Vice President, Delivery System Transformation, NA

Elisha Engelen
Vice President, Health Transformation at Aon

General Disclaimer

The information contained herein and the statements expressed are of a general nature and are not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information and use sources we consider reliable, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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The contents herein may not be reproduced, reused, reprinted or redistributed without the expressed written consent of Aon, unless otherwise authorized by Aon. To use information contained herein, please write to our team.

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