Monthly Archives:
June 2017

What’s Driving Medical Cost Trend Upward in 2018?

Medical cost trend is projected to have a slight uptick next year compared to the last three years, according to PwCs Health Research Institute (HRI) Medical Cost Trend: behind the numbers 2018 report.

Medical cost trend is the projected percentage increase in the cost to treat patients, assuming benefits stay the same. Insurers use the projection to calculate health plan premiums for the following year.

Annual Medical Cost Trend Expected to Be 6.5%

The anticipated growth rate for 2018 is 6.5 percent, half a percentage point higher than this year. Benefit design changes such as higher copays and narrower provider networks typically help hold down spending growth and is expected to do so next year by a percentage point, putting the net growth rate at 5.5 percent.

There are several factors affecting both sides of medical trend. While single digit increases have become the new normal for projections, the report notes that health organizations and businesses will have to tackle the price of services and the rate of utilization in the future to keep healthcare affordable.

Upward Pressure

For 2018, these three factors are expected to put upward pressure on medical cost trend:

Rising Inflation

The US economy is heating up and impacting all prices, healthcare costs included. With employers hiring and businesses and consumers spending, general inflation is rising and will likely put pressure on wages, medical prices and cost trend.

Movement to High Deductible Health Plans Slow

Less employers (28%) are considering only high deductible health plan offerings over the next three years, compared to (44%) in 2014, according to the 2017 PwC Touchstone Survey. A slowdown in the shift to HDHPs means employers may see an increase in utilization and will therefore have to look on the service-side of things such as narrower provider network and centers of excellence to bring down price instead of utilization.

Less Branded Drugs are Going Off Patent Protection

Fewer branded drugs have been coming off patent since 2016, meaning savings cannot be realized by generics coming onto the market in 2018. Generic prices are typically 80 – 85% less than branded originals within a few years of a patent expiring and create significant cost savings. Employers often use formularies with generics and encourage their use to help decrease medical costs.

Downward Pressure

There are also two emerging forces that may put downward pressure on health spending increases:

Public and Political Pressure to Keep Drug Prices in Check

Negative pressure is causing pharmaceutical companies to address pricing and value. Heightened political and public attention has the ability to cause drug-makers to hold price hikes in check, while for some drugs in the past year have had triple and quadruple digit percentage increases.

Employers Target New Treatments and Technologies to Reduce Waste

Employers looking to maintain access to care and minimize waste are turning to where treatments are administered, coordinating care, artificial intelligence, new technologies and traditional strategies to effectively keep employees covered and maintain costs.

Source:  PwC Health Research Institute. Medical cost trend: Behind the numbers 2018.

Smartphones and Apps Growing in Use to Manage Personal Healthcare

There are many challenges facing the health industry today such as a growing and aging population, many of whom are staying in the workforce, decreasing health budgets, and a rise in chronic diseases. Health organizations are putting their resources in technology to provide a solution to these challenges.

This is a good thing as health plans and employers looking to help employees manage their personal healthcare are turning to smartphones and health apps for assistance.

Remote Health Monitoring

Recognizing that existing protocols between physicians and patients need to change, there is a movement underway opening the door for remote health monitoring. This is a brand-new protocol where a physician treats an individual by continuous, actionable information being collected from the patient and digitally delivered to the provider to create more meaningful engagement between the two.

At the center of this are smart technologies, like smart phones, watches, and plasters (which some look like band-aids) that can provide insights that will deliver benefits to impact the physical, emotional and mental aspects of a person. Smartphones, which approximately two-thirds of U.S. adults now own, according to a 2015 Pew research study, already have fingerprint sensors and a camera. They also have the ability to connect through Bluetooth to monitors, activity trackers and medical devices like ECG machines to deliver data where and when its needed.

New Technology Forms

Multiple sensors in the form of jewelry, fabric garments and adhesive patches or plasters will be delivered moving forward based on personal preference. These sensors can then transform a smartphone into a personal health management device.  Some health insurers have recognized the value in these offerings and are subsidizing the cost of Apple watches and Fitbits for enrollees.

Gathering important biometrics and communicating them on a daily basis with little or no recharging is imperative for this technology to evolve into the mainstream. Using a smartphone means it’s also critical to have sufficient security and privacy in place. Data will not only need to be validated, but also acted upon. Learning from this data can help improve the quality and delivery of care to individuals everywhere.

Source:  Electronic Design. The Future of Digital Health. Feb. 2017 PP 30-31.

Three Reasons for Employees to Try Telemedicine

Telehealth services remain one of the hottest new benefits being offered by employers. It provides a fast and convenient way for employees to seek non-emergency care. Virtual care offers a method of delivering healthcare services that allow employees to save time and money. Continue reading

WEX Health Capitol Commentary: The Future of HRAs


Six months ago, the 21st Century Cures Act passed in Congress, enabling small businesses with fewer than 50 full-time employees to offer standalone Health Reimbursement Arrangements (HRAs). In this second video of WEX Health’s Capitol Commentary series, we ask executives share their thoughts on the future of HRAs in light of their progress to date in the first half of 2017.

Embracing and Promoting Social Wellbeing among Employees

Companies that understand the importance of investing in employees, as genuine resources are moving toward a more whole-person care approach to meet their diverse needs. Workplaces can no longer be viewed as silos, separate from all other aspects of employees’ lives. Keeping employees positively connected to their families, communities and coworkers provides a holistic method to delivering workplace benefits.

Taking a Wellness Program Beyond Health

Wellness programs are often used to bridge gaps in health coverage and more often than not simply equated with physical wellbeing. However, employee stress levels are reaching new highs and wellness programs need to expand and address these additional stressors in employees’ lives. Wellness programs components today, need to be comprised of physical, financial, emotional and social strategies to be effective.

The Social Component of a Wellness Program

The social component is probably the least talked about aspect of a wellness program. However, it probably shouldn’t be considering its impact. For example, an employee is responsible for an elderly parent that is ill. The employee’s time outside the workplace is consumed by caring for the elderly parent, leaving little time for any social interaction among friends or for group activities.

Additionally, employer surveys nationwide indicate that companies recognize that caregiving responsibilities negatively impact employee productivity too. So now at work, the less productive employee may not feel as connected to his or her team and/or organization. That’s a lot of stress and negativity for an employee to deal with both inside and outside the workplace.

Creating an Environment Conducive to Employee Social Wellness

So what can employers do to foster an environment that promotes social wellness?

First, recognize its importance and impact on an employee’s life.  Many more employees are going to being dealing with caregiving situations as the U.S. population older than 85 has doubled in the past two decades and as more women (who are traditional sources of caregiving) now comprise 47% of the workforce, according to U.S. Bureau of Labor 2016 statistics.

Opportunities to Improve Social Wellbeing in the Workplace

The positive impact that healthy relationships both in and outside the workplace bring to an organization need to be incorporated into corporate wellness initiatives. A recent Employee Benefit Plan Review article offered several insights for organizations to discuss to positively grow this aspect of their wellness program offerings.

  • Consider celebrating milestone markers of company anniversaries and bringing employees together for birthdays.
  • Make time for larger team and department meetings to share achievements and challenges, as well as reconnect employees to the vision, core values and mission statement of the organization.
  • Provide an employee social network, where employees can ask questions and ask for help from other employees.
  • Promote all aspects of diversity to create a culture of social acceptance and an opportunity for all opinions to be heard and valued.
  • Look to foster relationships between the organization and the community. Broaden the scope of social connectedness to outside the workplace and involve employees and their family members and everyone will benefit.

Source:  Employee Benefit Plan Review. Wellness Programs – Social Wellness. May 2017. PP5-6.