As we embark on a new decade it would be practical to reflect on the one just concluded. Arguably, the employee benefits landscape evolved more in the last 10 years than ever before and yet, global spending on health care remains higher than general global inflation. Over the last decade, the consumer has become the centre of the process and technology has changed almost every aspect of the market. Wellness has developed into well-being, and the workforce has evolved into more generations and become more mobile and fractured. In this new decade, employee benefit packages will be as critical as ever for companies that want to evolve and succeed; meeting many of the challenges that lie ahead will require time and effort.
1. Continued concern for rising prescription drug costs
Costs for prescription drugs have been rising for several years and show no signs of slowing down. While much of this issue is found in the U.S. it really is a global challenge. Worldwide, drug sales are projected to reach $1.18 trillion by 2024, which would represent compound growth of almost 7 percent. Further, spending is also rising, because as new drugs are coming to market, they are doing so at much higher rates than a decade ago – and this applies to both brand and generic drugs. Managing the pharmacy plan will require employers to have an aggressive approach and constant supervision.
Potential Employer Strategies:
- Review all partnerships within the pharmaceutical chain to understand the revenue flow and ensure lowest costs are provided and the member experience is superior.
- Provide members with tools that allow them to shop for drugs to find a lower price.
- Evaluate claims data to find any trends in utilisation, chronic conditions, plan and member cost sharing, rebates and provider prescribing patterns that can be positively impacted.
- Promote targeted specialty pharmacy management.
2. Mental health
The issue of mental health is becoming a global epidemic. It is considered that almost 450 million people worldwide have a mental health disorder and many people still do not seek treatment. These conditions cost businesses billions of dollars and impact not only the employee but their family and coworkers as well. Employers are uniquely positioned to help their workers address these issues and have great incentive to take the lead on addressing this growing concern.
Potential Employer Strategies:
- Build a workplace culture that supports mental health, eliminates stigmas and empowers employees to speak freely. Managers will need resources to address any mental health issues and to provide the right feedback at the right time.
- Provide initiatives at the workplace such as classes / workshops on mindfulness and stress management to help foster a supportive environment.
- Review your claims data to see where potential gaps in care exist and where additional opportunities for support and engagement may lie.
3. Addressing the rising obesity issue
The number of people worldwide that are overweight or obese is continuing to rise (more than half the population is overweight in 34 out of 36 OECD countries). Individuals that are overweight typically utilise healthcare benefits more, and they have higher prevalence of diabetes, cardiovascular disease, hypertension, cancer and depression. Not only will this population negatively impact employer provided benefit plans, but workforce productivity and life expectancy will suffer as well. Companies need to ensure their culture does not run counter to its employees realising and maintaining a healthy lifestyle.
Potential Employer Strategies:
- Promote and support physical activity at the workplace. Lack of physical activity remains a tremendous problem for many regions.
- Replace unhealthy food options in vending machines / cafeterias / office meetings with more healthy options.
- Increase the number of workplace wellness options and provide monetary incentives to increase participation. Weight management programmes and nutrition classes should be made available. Health coaching and sleep programmes can also provide a personalized experience.
- Review compensation practices to ensure certain roles or positions are not lagging. Those in lower income groups tend to have a higher prevalence of obesity.
4. Cost shifting to employees may subside
As the cost of providing health care has continued to rise at an unsustainable rate, many employers and insurers have used plan design features (e.g. deductibles and coinsurance) and increased employee contributions to assist hold back medical rate increases. What employers have learned in the last few years is that they are reaching the end of the runway on shifting costs on to the back of the workforce and 2020 may be an inflection point. As the labour market remains competitive, employers recognise the need for a competitive benefits package and that removing as much of the financial burden as possible leads to a more productive workforce and improved business results.
Potential Employer Strategies:
- Education remains a critical tactic. Employees remain challenged on understanding their health, how to improve it and how to budget their health spending. Providing communications that are tailored to the individual will also make an impact.
- Restructure plan designs to incentivise healthy behaviours and steer employees to select medical providers that provide the best in care and at lower-cost sites.
- Wherever possible, provide employees with access to virtual care. Many consumers enjoy this alternate experience and costs are lower than in a traditional doctor setting.
5. Generation Z enters the workforce
This is the decade that sees Generation Z (those born after 1996) entering the workforce and they are viewing things much differently than their predecessors. This group will expect benefits to be mobile and flexible, they’ll expect to have reviews on the benefits package from their peers before selecting any options, and they’ll look for guidance and advice, and provided by the employer. Employers will have to build loyalty with this age group and the benefits offering will go a long way toward achieving this.
Potential Strategies:
- Ensure that all offerings have a mobile feature. Gen Z is the total smartphone generation.
- Constant communication and education will be critical. This group will want input before they buy any benefit products, and personal counselling will be very welcome.
- Any benefits campaign will need a presence on social media to reach this group and create an impact.
- Benefits will need to be flexible and portable. This generation will likely work more than one job concurrently.
