Employers Call for Regulation and Transparency from Health Insurance Companies

The major costs for employers are drug prices and hospital visits, threatening health plan affordability. 

In August and September 2020, the National Alliance of Healthcare Purchaser Coalitions conducted the “Pulse of the Purchaser” survey, collecting data on healthcare costs for 165 employers from across the country. 

90% of the employer respondents stated that drug prices were the greatest concern as they are unregulated and continue to rise in price causing the consumer and employers to pay much more than anticipated. 49% of employers use medication therapy management, meaning just about half are directly affected by a rise in drug prices. These employers call for regulation on drug prices so that they are not only lower, but are predictable. 

Another call for regulation is surprise medical billing. 58% of employers said that surprise medical bills threaten their ability to afford the employer-sponsored health plans on behalf of their employees. 

Additionally, 90% of respondents called for transparency of hospital prices and 79% called for rate regulation from the hospitals. Hospital prices pose a large threat to affordability as well as the lack of transparency in the costs associated with a hospital visit. 

General waste or overuse of low-value services are also a concern for employers. 53% reported waste as a threat to healthcare plan affordability. This is not only a threat to employers, but a financial threat to those using the system: employees and their families. 

Given the survey data, we would expect employers to reevaluate their healthcare spending and perhaps cut back on benefits. However, that is not the case. Only 1 in 5 employers are reassessing their coverage, while the others are staying on course, evaluating increases in benefits and eating the cost increase. These employers recognize that Covid-19 has created enough unpredictability and they don’t want to add to it by changing benefits. 

About half of the employers stated they would be open to Medicare for All as a cost reduction strategy. Employers are looking at various options for cost reduction such as different healthcare delivery and payment reform measures. According to the research, “In the next two years, 44 percent of employers are considering hospital quality transparency and 43 percent are considering hospital pricing transparency as strategies in order to promote value-based care for their employees. Additionally, 39 percent of employers are considering regional centers of excellence in the next two years. Advanced primary care is a strategy that 36 percent of employers are looking into over the next two years. “ -www.healthpayerintelligence.com

Not only are employers looking at healthcare spending, but they are looking at overall health and wellbeing of their staff. This new trend is leading employers to create policies regarding racial equity, flexible work schedules, mental health support, leave for caregivers and more. If the Coronavirus brought about anything positive, it’s that we are being forced to look at the health and wellbeing of people in a different lens. Employers are using this time to change for the better and demand that the healthcare industry does the same.