Dive Brief:
- Employers identified the high cost of medical services and specialty drugs, such as GLP-1s and other weight loss medications, as their top two healthcare cost management pain points, according to the 2024 US Physical & Emotional Wellbeing Report by Gallagher, a global insurance brokerage, risk management and consulting services firm.
- To manage the costs of weight loss drugs, employers are increasingly managing utilization by requiring prior authorization and linking coverage to enrollment in a weight management program, the report found.
- “The advantages of new treatments for obesity and excess weight are evident, but the significant cost associated with these medications cannot be ignored,” William Ziebell, CEO of Gallagher’s benefits and HR consulting division, said in a statement. Some employers require employees to attain a certain body mass index and actively participate in well-being programs before a GLP-1 prescription will be covered, he said. “A holistic strategy, such as this, will likely result in better outcomes, as well as improved employee engagement.”
Dive Insight:
Overall, a little more than half (52%) of employers said they effectively manage healthcare costs, per the July 30 report.
Ninety-two percent of the 3,552 organizations surveyed said they faced health plan premium increases during the most recent renewal period, and 24% of those that did experienced double-digit increases, the report said.
To combat rising costs, many employers (80%) offer more than one health plan. Consumer-directed health plans with health savings accounts are now offered by 56% of companies, up 16 points from 2020, and are one of the fastest growing types of plan, the report said. At one-quarter of these companies, CDHPs paired with HSAs are the most popular plan.
Employers also are using value-based care approaches to provide better care at a lower cost, the report said. Seventeen percent of those surveyed cut the cost of prescription drugs for chronic conditions for employees, and 14% said they lower employee costs when workers use designated centers of excellence for specific medical procedures, the report found