National survey podcast healthcare costs

Podcast: How Employers Are Keeping Healthcare Costs Down

Mercer’s 2015 National Survey on Employer-Sponsored Health Plans offers a positive takeaway for organizations contending with rising healthcare costs: proactive employers can manage their benefits budget by using the best practices our survey identified. Join us for a podcast with Beth Umland to get tips on holding down your organization’s healthcare costs into 2016 and beyond. 

Beth Umland, Director of Research for Health and Benefits

Click here to listen to the podcast (5:49)

 

The health cost trend has leveled out at around 3-4% in the past few years after hitting a peak in the early 2000s. We talked to Beth about what’s behind that trend, and what it means for employers large and small.

 

Beth points out that “a trend is an average.” “I always like to go behind the average to see what’s going in with individual employers,” she says.

So what’s behind this trend? While healthcare cost increases have indeed been at historically low levels in the past few years, there’s still great variation from employer to employer. Larger employers had a lower cost trend than smaller ones this past year, but even the larger employers were all over the spectrum:  some experienced high cost increases while some sailed through the year with flat or even decreased costs. 

“It’s been one of the busiest periods [for cost management] in my memory,” says Beth. “Part of this has been some pressure from health reform and the excise tax—employers didn’t want to hit that text threshold, so they’ve been doing a lot of work to keep costs down.”

The research team identified three main areas for employers to focus on to manage costs: plan design, employee wellbeing, and care delivery. They pinpointed 25 specific cost management practices employers were using and analyzed their connection to overall healthcare costs. They found that the employers who employed the largest number of best practices—16 or more—had lower costs per employee and a lower overall trend. 

“This year, the folks that were doing the most cost management strategies had a trend of under 3%, and the folks who were doing the fewest had a trend of 3.8%,” says Beth.

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