Best Practices in Health Care Employer Survey - The 24th Annual Willis Towers Watson - Willis Towers ...

 
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Best Practices in Health Care Employer Survey - The 24th Annual Willis Towers Watson - Willis Towers ...
The 24th Annual Willis Towers Watson

Best Practices in Health
Care Employer Survey
Best Practices in Health Care Employer Survey - The 24th Annual Willis Towers Watson - Willis Towers ...
Table of contents

Executive summary............................................................................................................... 3

      Identifying the best performers................................................................................. 5

About the survey....................................................................................................................6

      Findings at a glance....................................................................................................... 7

Highlights..................................................................................................................................9

Chapter 1: Health benefit strategy................................................................................. 12

Chapter 2: Improve access to quality, affordable health care............................. 18

      Subsidization and plan design.................................................................................. 18

      Health care network and delivery solutions....................................................... 23

      Pharmacy management............................................................................................. 28

Chapter 3: Enhance wellbeing........................................................................................ 30

Chapter 4: Delivering a high-tech, high-touch employee experience..............37

Chapter 5: Data analytics: measuring impact............................................................ 41

How your organization can become a best performer.......................................... 43

                                                                                                                                                willistowerswatson.com   2
Best Practices in Health Care Employer Survey - The 24th Annual Willis Towers Watson - Willis Towers ...
Executive summary

In today’s full-employment economy, employers                increasing health care affordability for employees          Improving access to cost-efficient quality care.
are under pressure to offer competitive health care          while controlling costs for the organization is the top     Although two-thirds of employers say they've made
benefits even as health care costs continue to rise.         priority for almost all employers (93%) and the most        progress in containing health care costs and improving
According to the 24th Annual Willis Towers Watson            challenging priority for almost two-thirds of employers     affordability over the past three years, work remains
Best Practices in Health Care Employer Survey,               (63%) over the next three years.                            to be done. To tackle the cost and affordability issue,
health care costs are projected to climb 4.9% in                                                                         companies are focusing on the following levers:
2020 compared with 4.0% in 2019. Despite this                Employers are increasingly putting employees at
cost increase, employers believe they will continue          the center of their health and wellbeing strategies.        ƒƒ
                                                                                                                          Implementing value-based designs to steer
to sponsor health benefits over the next decade.             They’re focusing on understanding employee needs              employees toward proven services that produce
Nearly all employers (95%) are very confident their          and expectations in order to shape health and                 positive health outcomes at a lower price tag (U.S.
organization will continue to sponsor health care            wellbeing programs that will give them a competitive          health care costs are largely reflective of high unit
benefits in five years.1                                     edge in a tight labor market. In addition, employers          prices, and there is often little correlation between
                                                             recognize the financial struggles some employees              unit price and quality)
Looking at the longer term, employers’ confidence in         face. Consequently, they are adding choice and              ƒƒ
                                                                                                                          Focusing on clinical conditions — including mental/
sponsoring these benefits in 10 years grew to 74% —          customizing benefits in order to more efficiently deliver     behavioral health, metabolic syndrome/diabetes,
up from 69% in 2018 — reaching the highest level in          value to employees. With a focus on what employees            musculoskeletal and cancer to improve outcomes
the past decade.2 These employers plan to continue to        value, companies are also better positioned to                and reduce costs through such interventions as
provide health care benefits to support employees to         engage employees in programs that promote healthy             vendor point solutions, steerage to high-quality
be physically and mentally healthy, and thrive on the job.   behaviors and support employees in their health care          providers and centers of excellence (COEs), and
                                                             decision making. Their three key priorities are:              programs aimed at reducing wasteful or harmful care
As cost pressures continue, employers recognize
the challenges employees face in covering both their         1. Improving access to cost-efficient quality care          ƒƒ
                                                                                                                          Expanding use of onsite and near-site health clinics
payroll deductions and out-of-pocket costs for health                                                                      to gain greater control over costs
                                                             2. Enhancing wellbeing
care benefits. In fact, 89% of employers believe                                                                         ƒƒ
                                                                                                                          Encouraging greater use of virtual care models,
                                                             3. Delivering an employee experience that blends high
rising health care costs are a significant source of                                                                       telebehavioral health services, COEs,
                                                                tech with high touch
financial stress for their employees. Consequently,                                                                        high-performance networks and expert medical
                                                                                                                           opinion programs to help ensure cost-effective,
                                                                                                                           appropriate, quality care
                                                                                                                         ƒƒ
                                                                                                                          Influencing site of care for specialty drugs and
                                                                                                                           promoting use of biosimilars, when available, to
                                                                                                                           manage specialty drug costs
1
    Sample: Companies with at least 1,000 employees
2
    Ibid., 1.

                                                                                                                                                             willistowerswatson.com   3
Best Practices in Health Care Employer Survey - The 24th Annual Willis Towers Watson - Willis Towers ...
Enhancing wellbeing. Employers remain committed           Delivering an employee experience that blends             To understand their employees’ perspective regarding
to wellbeing programs and are pivoting toward             high tech with high touch. Facing many competing          these issues and better meet their needs, employers
more holistic programs that address physical as           priorities, employers have often overlooked the           plan to use a range of feedback channels, including
well as financial, emotional and social wellbeing.        need for a strategic approach to designing their          surveys, focus groups and town hall meetings. And
They recognize that employees who are physically          employee experience. But, in the next few years,          they will focus on technology solutions to address
thriving, financially secure, emotionally balanced and    more companies expect to create an employee               these issues and deliver an improved employee
socially connected are more engaged and drive better      experience strategy that is differentiated from that of   experience throughout the health care journey. These
business outcomes.                                        their competitors and customized to meet the needs        solutions include decision support tools to provide
                                                          of critical employee segments. And they plan to use       enrollment recommendations and to support treatment
However, wellbeing remains a challenging priority         organizational analytics to assess the effectiveness of   decisions. In this way, companies provide a high-tech,
given traditional low engagement levels. Because the      their strategy.                                           high-touch employee experience.
use of financial incentives in wellbeing programs is
leveling off, employers are placing a greater emphasis    To improve the employee experience, employers will        Companies understand that in order to put employees
on health culture as a way to boost engagement.           focus on several key priorities:                          at the center of their health care strategy, they will
They are shaping a healthy work environment and                                                                     need to sharpen their understanding of employees’
building wellbeing programs into their employee value     ƒƒ
                                                           Enhancing the enrollment experience                      diverse needs and use the resulting insights to craft
proposition. This involves emphasizing workplace          ƒƒ
                                                           Integrating wellbeing vendors to provide a more          solutions that drive greater engagement and improved
dignity, which is key to building trust with employees      unified experience across physical, financial,          health care decision making. By refining program
and successfully engaging employees in their                emotional and social dimensions                         design and delivery solutions, and offering wellbeing
wellbeing. Some of the initiatives employers are                                                                    programs and a more relevant, personalized employee
using to support a healthy work environment include:
                                                          ƒƒ
                                                           Adding more choice in all benefits
                                                                                                                    experience, employers will unlock opportunities to
paid parental leave beyond what is required by law,       ƒƒ
                                                           Offering care advocacy/navigation services               improve affordability for employees while controlling
programs that focus on stress and resiliency, financial                                                             costs for the organization.
management tools and the use of human-centered
design in wellbeing programs.

A growing number of employers are measuring the
impact of wellbeing programs using a variety of
financial and nonfinancial metrics. Known as value on
investment, this approach enables employers to move
beyond ROI metrics and evaluate such factors as
employee satisfaction, participation, productivity and
mitigation of health risks. Such an approach provides a
more complete assessment of program impact.

                                                                                                                                                      willistowerswatson.com   4
Identifying the best performers
Our research identified 44 companies that           We selected best performers from the
qualify as best performers based on their ability   454 companies that completed the 2019
to manage cost trends and efficiency (see page      Willis Towers Watson Financial Benchmarks
16). Best-performing companies exhibited the        Survey and the 2019 Willis Towers Watson Best
following two characteristics:                      Practices in Health Care Employer Survey with
                                                    sufficient health care cost trend and efficiency
ƒƒ
 Efficiency: efficiency in 2019 that is 5% or       information. These best performers gain
  greater (roughly 60th percentile and above)       significant competitive advantage by creating and
ƒƒ
 Cost trend: two-year average trend after plan      leveraging best practices that improve access to
  changes (2017/2018 and 2018/2019) that is at      cost-efficient quality care, enhance wellbeing and
  or below the national norm (4%) and two-year      improve the employee experience.
  average trend before plan changes (2017/2018
  and 2018/2019) that is at or below the national
  norm (5%)

                                                                                                         willistowerswatson.com   5
About the survey

The 24th Annual Willis Towers Watson Best Practices in Health Care Employer Survey was completed by U.S. employers between June and July 2019, and reflects
respondents' 2019 health program decisions and strategies, and expected changes for 2020 and 2021. Respondents collectively employ 11.3 million employees and operate
in all major industry sectors. Results provided are based on 610 employers with at least 100 employees (Figure 1).

  Figure 1. About the 24th Annual Best Practices in Health Care Employer Survey

    610 employers                                                                  Employer size                         Industry

    (with at least 100 employees)
    responded to the survey

                             11.3M+ employees
                                    at responding organizations

     46% For profit, publicly traded
                                                                             100 to 
                                                                                     999100 to 999                          Energyand   Utilities
                                                                                                                                       Energy    and Utilities
                                                                             1,000 to
                                                                                      4,999
                                                                                        1,000 to 4,999                      Financial
                                                                                                                                     Services
                                                                                                                                       Financial Services
     36% For profit, private                                              
                                                                          
                                                                              5,000 to
                                                                                      9,999
                                                                                        5,000 to 9,999
                                                                              10,000to10,000
                                                                                         24,999to 24,999
                                                                                                                         
                                                                                                                         
                                                                                                                             GeneralServices
                                                                                                                             Health 
                                                                                                                                       General Services
                                                                                                                                    Care
                                                                                                                                       Health Care
                                                                             25,000+ 25,000+                              IT and 
                                                                                                                                    Telecom
                                                                                                                                       IT and Telecom
                                                                                                                             Manufacturing
     16% Nonprofit/Government
                                                                                                                                    Manufacturing
                                                                                                                            Public Sector
                                                                                                                                     Publicand   Education
                                                                                                                                                Sector and Education
                                                                                                                            Wholesale   and Retailand Retail
                                                                                                                                     Wholesale

                                                                                                                             Note: Percentages may not add up to 100% due to rounding.

                                                                                                                                                              willistowerswatson.com     6
Findings at a glance
      Confidence rising                                         Top clinical condition

        74%                                                                    66%
                                                                               will emphasize
        are confident
                                                                               mental/behavioral health
      that the organization will continue                                      over the next three years
      to sponsor health care benefits in 10 years,
      an increase of 5% over 20183

      Capture the potential                                                     65%                                   Focus on wellbeing
                                                                                will enhance navigation to
      of telebehavioral health

                                                                                                                      50%
                                                                                services to improve mental/

      89%
                                                                                behavioral health during
                                                                                this period                           have made progress on enhancing employees’
      are expected to offer coverage for telebehavioral                                                               total wellbeing over the past three years
      health services by 2021, up from 72% today

                                                                                                                      83%
                                Tackling affordability and costs                                                      think it’s important to enhance employees’ total
                                                                                                                      wellbeing in the next three years, but…
                                Cost increases remain steady at 5% before plan changes

                                                                                                                      Only 41%
                                 68%                      93%                           63%                           agree that their wellbeing programs meet
                                                                                                                      employees’ needs
                                 have made progress       say affordability and costs   indicate that continued
                                 over the past three      for the business and          progress will be their
                                 years                    members is a top priority
                                                          over the next three years,
                                                                                        biggest difficulty over the
                                                                                        next three years
                                                                                                                      Only 30%
                                                                                                                      say their programs inspire employees to
                                                          but…
                                                                                                                      achieve their personal goals

3
    Ibid, 1

                                                                                                                                                      willistowerswatson.com   7
Findings at a glance
Top wellbeing actions by 2021                              Prioritize technology to support
                                                           employee wellbeing
 Physical                       Financial
                                                           Actions by 2021
 85%                            44%
 sponsor programs               track metrics and
 or pilots that target          objectives for use of
 specific conditions            programs at pivotal        55%
 or high-cost cases             decision points and        have a formal technology strategy to
                                segments most at risk      support wellbeing programs and goals

 Social                         Emotional
                                                           70%
                                                           offer apps and connected devices for

 68%                            74%
                                                           condition management or reducing
                                                           health risks
 use workforce data and         redesign employee
 analytics to develop a
                                                           78%
                                assistance program to
 strategy for improving         better address emotional
 diversity and inclusion        and financial wellbeing    integrate wellbeing vendors and
                                                           employee experience across physical,
                                                           financial, social and emotional wellbeing

                                                                                      willistowerswatson.com   8
Highlights
Access, quality and affordability
Strong interest in plan design and                       Rethinking ABHPs but expanding HSAs                        Focus on vendor and network strategies
value-based designs
                                                         Account-based health plan (ABHP) sponsorship has           Evaluating vendors best positioned to help deliver on
Almost 90% of employers (87%) are making it a priority   leveled off, with the number of employers offering         their organization's strategy is a top priority for 79%
to align plan design with the organization's business    ABHPs expected to grow a mere 1%, from 84% today           of employers over the next three years. As part of this
and workforce strategies over the next three years.      to 85% by 2020.4 About 20% of employers eliminated         effort, organizations are looking to improve specific
                                                         a total replacement strategy in recent years in favor of   high-cost clinical conditions.
Organizations are also focusing on value-based           providing more options. Of those still offering ABHPs
designs to reduce out-of-pocket costs for the use of     as a total replacement, 25% plan to eliminate this         To encourage use of high-performance networks,
high-value services and increase out-of-pocket costs     strategy by 2021.4                                         employers are reducing employees' share of premiums
for specific overused services.                                                                                     or point-of-care costs for high-performance network
                                                         While there is still a compelling rationale for ABHPs,     plans. As part of this effort, organizations are looking
                                                         concerns around affordability at the point of service      to improve the delivery of health care for employees
                                                         have led more companies to diversify plan design           with specific clinical conditions prevalent among their
                                                         options. New plan options, many with value-based           population.
                                                         designs, offer other alternatives.
                                                                                                                    Controlling pharmacy costs
                                                         Health savings account (HSA) offerings continue to
                                                         expand significantly. Ninety-seven percent of ABHP         Over the next three years, companies will prioritize
                                                         sponsors4 are expected to offer HSA-based plans by         pursuing cost-effective options to manage overall
                                                         2021. Today, most companies that offer an HSA4 also        pharmacy spend and, specifically, specialty drug costs.
                                                         contribute funds to the accounts (87%); the majority       But pharmacy costs rank among the most difficult
                                                         do so by simply seeding the account (84%), while           areas to improve.
                                                         25% link contributions to wellbeing participation and
                                                         7% use matching designs. With rising concerns about        Among the top strategies planned or under
                                                         affordability, employers are providing choices to meet     consideration to address rising pharmacy spend are
                                                         the needs of a diverse workforce, and HSA-eligible         evaluating and addressing specialty drug costs and
                                                         plans continue to be an important option.                  utilization performance, promoting use of lower-cost
                                                                                                                    biosimilars and adopting point-of-sale rebates.

4
    Ibid, 1

                                                                                                                                                       willistowerswatson.com   9
Integrated wellbeing
Strong commitment to wellbeing —                            Incorporating inclusion and diversity
with more work to do
                                                            More employers are incorporating inclusion and
Employer commitment to and prioritization of wellbeing      diversity priorities into their wellbeing program design
are stronger than ever. As organizations continue to        with an expected 62% planning to take action by
focus on total wellbeing, looking beyond the physical       2021. And while more employers are highlighting or
to include financial, emotional and social aspects, they    plan to highlight for employees the benefit changes
also recognize that enhancing wellbeing requires an         addressing inclusion and diversity, over half (52%)
integrated approach focused on moments that matter          have not done so.
to the individual employee.

                                                            Opportunity to improve data and metrics
Health culture becomes a top priority
                                                            While only 37% of employers say they've made
Employers are placing a greater emphasis on health          progress over the past three years in using data and
culture, creating a workplace environment supported         metrics to evaluate the performance of their health
by managers/leaders that encourages employees to            care and wellbeing programs, 78% are making it a
live healthier lives and, therefore, to thrive at work.     priority over the next three years.

While only 35% of employers reported making                 The resulting 41% gap indicates that much work
progress in health culture in the past few years, 73%       remains to be done.
say they will make health culture a top priority over the
next three years. Yet companies rank health culture as
among the most difficult areas to improve.

                                                                                                                       willistowerswatson.com   10
Employee experience
Understanding employees' wants and needs                   Growing use of decision support tools
Employers are increasingly using surveys, focus groups     More employers plan to offer recommendation tools
or town hall meetings to identify employees' wants and     that support enrollment decisions. While 46% say they
needs when designing programs or making changes.           use these tools today, this percentage is expected to
To develop a sharper focus on employees' desires           grow to 77% by 2021. In addition, 36% of organizations
and requirements, organizations are also applying          are offering treatment decision support tools, a
human-centered design to wellbeing programs.               number anticipated to increase to 65% by 2021.

The number of employers using human-centered
                                                           Improving advocacy and navigation
design as well as tools such as surveys and focus
groups to understand employee wants and needs is           Employers are enhancing the employee experience
anticipated to grow to 61% by 2021.                        by improving health care advocacy and navigation
                                                           services, with 69% expecting to do so by 2021.
                                                           Increasingly organizations are offering services to
Building an employee experience strategy
                                                           guide employees and their families to providers based
While nearly half of employers don't have an employee      on high-quality data.
experience strategy today, they expect to catch up
quickly. Over the next three years, 73% will make it a
priority to develop a differentiated employee experience
customized for different workforce segments.

                                                                                             willistowerswatson.com   11
Chapter 1

Health benefit strategy: focus on controlling health care costs
and making health care affordable
Cost and risk
Health care cost trends after plan changes continue                              Respondents to our annual survey expect total health                   The relentless increases in health care costs along
to be well above the rate of inflation. With no end in                           care costs (employer and employee) to rise 4.9% in                     with the sustained cost shifting to employees over the
sight to the persistent rise in health care costs, U.S.                          2020 after plan design changes, up nearly a full point                 past 14 years make affordability a challenge for many
employers are focused on controlling costs while also                            from 4.0% in 2019 (Figure 2).5 According to findings                   employees, particularly low-wage workers. Employees
making health care more affordable for employees.                                from our Financial Benchmarks Survey, the average                      paid, on average, 23% of total premium costs in
                                                                                 cost of health care is $13,087 per employee per year                   2019. In paycheck deductions, this translates into an
                                                                                 (PEPY) in 2019 and is expected to rise to $13,728 in                   average annual employee contribution of $3,031 in
                                                                                 2020. By point of comparison, the U.S. inflation rate is               2019, which would rise to nearly $3,180 in 2020 under
                                                                                 expected to average 1.8% in 2019 and to increase to                    current plan designs.
                                                                                 2.0% in 2020. Without plan changes, cost trend would
                                                                                 be 5.0% in both 2019 and 2020.6

      Figure 2. Health care costs before and after plan changes
                 14.7%
                                                                                                                                                           Health care cost trends after plan changes
                            13.0%                                                                                                                          are well above the rate of inflation.

                                       11.3%
        10.3%
                                                                          9.0%
                                                  9.2%                                       8.0%
                                                                                   8.0%                8.0%      8.0%
                                                             8.3%
                                                                                                                             6.8%
                                                                                             6.8%     6.8%                          6.0%      6.0%                    6.0%
                                                                          6.4%
                                                                                                                                                          5.0%                    5.0%        5.0%       5.0%         5.0%
                                                                                   5.3%                          5.5%        5.5%
                                                                                                                                              4.9%                                                                    4.9%
                                                                                                                                    4.2%                              4.4%
                                                                                                                                                          4.0%                    4.0%        4.0%        4.0%

         2001    2002       2003       2004       2005       2006         2007     2008      2009      2010      2011        2012   2013      2014        2015        2016        2017        2018        2019^       2020*

                Health care trend after plan changes (total plan costs)              Health care trend before plan changes
                                                                                                                                           Note: Percentages of health care trend are median numbers.
                ^Expected; *Projected                                                CPI-U                                                 Sample: Companies with at least 1,000 employees
                                                                                                                                           Source: 2019 Willis Towers Watson Best Practices in Health Care Employer Survey
5
    Ibid., 1.
6
    Ibid., 1.

                                                                                                                                                                                                        willistowerswatson.com   12
Facing their own rising costs, employers will continue                                  These include:                                                 Confidence continues to rise
to look for ways to mitigate the impact of cost
                                                                                        ƒƒ
                                                                                         Encouraging use of network and delivery solutions,            In a tight labor market, employers report they are
increases. While many employers have implemented
                                                                                             such as telebehavioral health services, centers           highly likely to continue to sponsor health care
account-based health plans (ABHPs), a quarter of
                                                                                             of excellence (COEs) within health plans, onsite/         benefits over the next decade. In fact, nearly all
companies that offered ABHPs exclusively in 2019
                                                                                             worksite health promotion activities, onsite and near-    employers (95%) are confident that they will offer
intend to reintroduce plans with lower point-of-care
                                                                                             site health clinics, and high-performance networks        health care benefits in five years, up one point over
costs by 2021.7 With the maturation of ABHPs along
                                                                                             (HPNs)                                                    2018. This confidence extends over the longer
with the greater emphasis on affordability, and the
                                                                                                                                                       term, with 74% of employers indicating that they
need to attract and retain talent in a competitive                                      ƒƒ
                                                                                         Proactively managing pharmacy benefit costs with              are confident they will offer health care benefits in
environment, employers are more focused on                                                   a particular emphasis on specialty drug costs and         10 years, an increase of five percentage points over
implementing a range of strategies that improve plan                                         utilization                                               2018 and a new 10-year high (Figure 3).8 Offering
efficiency and offer a better employee experience.
                                                                                        ƒƒ
                                                                                         Evaluating vendors best positioned to help deliver on         health care benefits is an important part of the reward
                                                                                             their organization's strategy                             package for employees of all ages, and it drives
                                                                                                                                                       improved health, wellbeing and productivity — the keys
                                                                                                                                                       to business success. However, the cost of health care
                                                                                                                                                       has become so high that if an alternative source of
                                                                                                                                                       coverage were to become available, it’s quite possible
                                                                                                                                                       for some employers to move in that direction.

      Figure 3. Employer confidence in sponsoring health care benefits over the next 10 years continues to grow

      How confident are you that your organization will continue to sponsor health care benefits to active employees in 10 years?
      (% of “Very confident”)                                                                                                                                                         +5
                                                                      73%                                                                                                                       74%
                                                                                                                                                                                   69%
                                                                                                                                                                         65%
                                                                                       62%
                                         59%                                                       57%
                                                                                                                                                               54%

                43%                                                                                                                                   44%
                                                                                                             38%

                                                                                                                                 26%       25%
                                                                                                                       23%

                2004      2005          2006          2007           2008          2009           2010       2011      2012      2013      2014       2015     2016      2017      2018         2019

     Sample: Companies with at least 1,000 employees
     Source: 2019 Willis Towers Watson Best Practices in Health Care Employer Survey

7
    Ibid., 1.
8
    Ibid., 1.

                                                                                                                                                                                          willistowerswatson.com   13
Identifying the key priorities
                                                            Figure 4. Employers value measurement and health culture over the next three years
As employers look to improve the health experience
and health outcomes, they are focused on the
                                                                                              Use data/metrics to evaluate the performance of
following key priorities (Figure 4):                          1      Measurement
                                                                                              your health care and wellbeing programs
                                                                                                                                                           37%                78%
                                                                                                                                                                                           +41
ƒƒ
 Measurement. Employers indicate a strong interest
  in using data and metrics to evaluate their health                                          Design systems and create a workplace
                                                                                              environment supported by managers/leaders that
  and wellbeing programs, with 78% reporting they
  will prioritize measurement in the next three years. In
                                                              2      Health culture
                                                                                              encourages employees to live healthy lives and
                                                                                                                                                           35%           73%
                                                                                                                                                                                          +38
                                                                                              thrive on the job
  particular, there’s growing interest in using a
                                                                                              Adopt connected devices, enhanced enrollment,
  value-on-investment approach, which involves                       Health
                                                                                              and integrated platforms and processes to
  leveraging a variety of financial and nonfinancial
  metrics to assess program impact. However,
                                                              3      technology
                                                                     solutions
                                                                                              improve delivery of care, navigation, health
                                                                                                                                                         30%            65%
                                                                                                                                                                                           +35
                                                                                              analytics and the consumer experience
  employers have much work to do in the measurement
  area, reflected in the 41-point gap between progress                                        Enhance employees' total wellbeing in the areas
                                                                     Employee
  made in the past three years and priority.                  4      wellbeing
                                                                                              of physical, emotional, financial and/or social
                                                                                              wellbeing
                                                                                                                                                                 50%           83%
                                                                                                                                                                                          +33

                                                                     Affordability and        Achieve health program costs that are affordable
                                                              5      costs                    for members and for the organization
                                                                                                                                                                       68%       93%
                                                                                                                                                                                           +25
                                                                                              Examine and leverage cost-effective options to
                                                              6      Pharmacy                 manage overall pharmacy spend and specifically
                                                                                              specialty drug costs
                                                                                                                                                                       63%      87%
                                                                                                                                                                                           +24

                                                                     Network                  Adopt health care delivery strategies to maximize
                                                              7      strategy                 the purchasing value of health care services
                                                                                                                                                            40%        64%
                                                                                                                                                                                           +24

                                                                                              Align overall health program design with the
                                                              8      Plan design
                                                                                              organization's business and workforce strategy
                                                                                                                                                                       68%     87%
                                                                                                                                                                                           +19

                                                                     Vendor/Carrier           Evaluate vendors best positioned to help deliver
                                                              9      strategy                 on your organization's strategy
                                                                                                                                                                        70% 79%
                                                                                                                                                                                            +9
                                                            Note: Percentage indicates “To a very great extent” or “To a great extent”.            Progress made over the past three years
                                                            Sample: Companies with at least 100 employees                                          Priority over the next three years
                                                            Source: 2019 Willis Towers Watson Best Practices in Health Care Employer Survey

                                                                                                                                                                               willistowerswatson.com   14
ƒƒ
 Health culture. Employers are committed to                ƒƒ
                                                            Employee wellbeing. Employers recognize the
                                                                                                                        Figure 5. Most challenging priorities to address cover
  creating a workplace environment that encourages           importance of enhancing employee wellbeing, which
                                                                                                                        the span of wellbeing, pharmacy and affordability
  employees to live healthy lives and thrive at work.        drives productivity and performance. Wellbeing is
  Even though they are using various means to                a top priority for over four-fifths of organizations
  promote a healthy workplace environment, such as           (83%), and half report making progress in their                              Which areas do you expect to be
  wellbeing programs, employers find it challenging to       wellbeing programs in the past three years, yet                              the most difficult to improve over
  make progress in this area. In fact, 45% indicate that     fewer than half (41%) think their programs meet                              the next three years?
  health culture will be most difficult to improve over      employees’ needs. Employers also ranked wellbeing
  the next three years, second only to affordability and     as one of the most difficult priorities to address,
  costs (Figure 5).                                          perhaps reflecting the challenge of addressing all
                                                             aspects of wellbeing: physical, financial, emotional
                                                                                                                          1              Affordability and costs
                                                                                                                                                                                 63%
ƒƒ
 Health technology solutions. Over the next three
  years, almost two-thirds of companies (65%) will           and social. It is critical for employers to recognize
  prioritize health technology solutions. Employers          the scope of this challenge as only 40% of                  2               Health culture
                                                                                                                                                                                 45%
  are especially interested in helping employees make        employees think that the initiatives and resources
                                                             offered by their employer to support their health and
  optimal decisions during enrollment and throughout
  their health care journey using a range of tools for       wellbeing meet their needs, according to 2019/2020          3               Pharmacy
                                                                                                                                                                                 39%
  decision support, health management, treatment             Global Benefits Attitude Survey.
  decisions and price transparency. In turn, these tools
  will improve the overall employee experience. But        These priorities are essential to building a sustainable      4               Employee wellbeing
                                                                                                                                                                                  37%
                                                           health benefit strategy and putting employees at
  slightly less than a third of employers (30%) report
                                                           the center of that strategy. Approaching wellbeing
  making progress in this area in the past three years.
                                                           from a more holistic perspective helps employers              5               Health technology solutions
                                                                                                                                                                                 35%
                                                           address the needs and preferences of today’s diverse,
                                                           multigenerational workforce that can vary across                    Network strategy                                      25%
                                                           physical, financial, emotional and social dimensions.
                                                           Technology solutions supporting improved navigation
                                                                                                                               Measurement                                           21%
                                                           and delivery of care along with a culture that prioritizes
                                                                                                                               Plan design                                           21%
                                                           health and wellbeing contribute to an enhanced
                                                           employee experience. And ongoing measurement                        Vendor/carrier strategy                               13%
                                                           helps ensure the continuous improvement of health
                                                           and wellbeing programs essential to an engaged and           Sample: Companies with at least 100 employees
                                                                                                                        Source: 2019 Willis Towers Watson Best Practices in Health Care Employer
                                                           productive workforce.                                        Survey

                                                                                                                                                                     willistowerswatson.com    15
Best performers create their own financial                We selected best performers from the 454 companies        About efficiency
advantage                                                 that completed the 2019 Willis Towers Watson              Willis Towers Watson adjusts the national benchmark
                                                          Financial Benchmarks Survey and the 2019                  to reflect differences between the PEPY costs of an
Employers continue to show dramatic differences in        Willis Towers Watson Best Practices in Health Care        organization and the database for each of these four
their ability to manage their health care cost trends.    Employer Survey. The 44 best performers represent         key criteria:
Our research identified 44 companies that qualify as      10% of eligible companies reporting both favorable
best performers based on their ability to manage cost     efficiency and cost trends before and after plan          ƒƒ
                                                                                                                     Age/Gender: The age/gender profile of the
trends and efficiency. Best-performing companies          changes at or below the national average. We estimate       population (Cost is directly correlated with age. The
must exhibit the following two characteristics:           best performers will pay $1,373 PEPY less than the          impact of gender on expected cost varies with age.)
                                                          typical company in our national survey ($11,887 in 2019   ƒƒ
                                                                                                                     Family size: The estimated number of members
ƒƒ
 Efficiency: efficiency in 2019 that is 5% or greater
                                                          compared with the national average of $13,260 — an
  (roughly 60th percentile and above) (Read “About                                                                    covered per employee, expressed in terms of adult
                                                          annual savings of more than $6.8 million at a company       cost equivalent (Larger-than-average family size
  efficiency” at right.)
                                                          of 5,000 employees). They also maintain a two-year          usually increases costs per employee.)
ƒƒ
 Cost trend: two-year average trend after plan            average cost trend after plan changes of 0.9% — 3.1
  changes (2017/2018 and 2018/2019) that is at            percentage points lower than the national average         ƒƒ
                                                                                                                     Geography: The underlying cost for basic health
  or below the national norm (4%) and two-year            (4.0%). While plan design changes have helped to            care services in an area (Provider competition and
  average trend before plan changes (2017/2018 and        mitigate their cost increases, best performers also         more prevalent managed care plans may reduce
  2018/2019) that is at or below the national norm (5%)   maintain a two-year average gross trend (before plan        costs in some areas. More enrollments in
                                                          design changes) that is 3.1 percentage points lower         higher-cost areas usually increase costs.)
                                                          than the national norm (1.9% versus 5.0%).                ƒƒ
                                                                                                                     Plan value: The level of benefits covered under the
                                                                                                                      medical plan (Plans reimbursing a higher percentage
                                                                                                                      of medical expenses than the database average
                                                                                                                      usually increase costs.)

                                                                                                                    The result of these adjustments is a benchmark that is
                                                                                                                    customized to each company’s population. The custom
                                                                                                                    benchmark is the database cost if the database
                                                                                                                    looked like that company’s population with its plan
                                                                                                                    designs. Efficiency represents the percentage that a
                                                                                                                    company’s PEPY costs are above or below the custom
                                                                                                                    benchmark with the most efficient plans reporting
                                                                                                                    costs significantly below the adjusted national norm.

                                                                                                                                                      willistowerswatson.com   16
What can we learn from best performers?
Best-performing companies lead the way in developing
high-performing health programs that manage costs
and add value, in part by implementing superior
network and provider strategies. Throughout the rest
of this report, we identify specific strategies and tactics
that best-performing companies use much more than
the national average or other organizations — best
practices focused on three core areas:

ƒƒ
 Participation
  ƒƒ
   Employee and dependent
ƒƒ
 Subsidization
  ƒƒ
   Program design value and subsidy level
ƒƒ
 Efficiency
  ƒƒ
   Vendor partner strategies
  ƒƒ
   Health care delivery
  ƒƒ
   Pharmacy management
  ƒƒ
   Workforce health
  ƒƒ
   Engagement and consumerism

While many factors can explain the reasons for best
performers holding the line on costs, these activities
are likely an important part of their recent success,         Measuring total plan costs: Where do we get our data?
and many are emerging trends that could position
them — and those that emulate them — for success
in the future. While best performers are leading the          Total plan costs for this study are based on Willis Towers Watson’s annual Financial Benchmarks Survey,
way, there is significant opportunity for all companies       which includes detailed medical plan cost values on 2,168 companies with more than 10.4 million enrollees and
to take actions to rein in costs and improve the              total costs of over $132.3 billion. By incorporating the use of this deep and broad database in our annual
performance of their health care programs.                    Willis Towers Watson Best Practices in Health Care Employer Survey, we enhance our ability to provide
                                                              detailed annual plan costs for over 20 industry groups.

                                                              For fully insured medical and pharmacy plans, the costs presented reflect premium rates. For self-
                                                              insured plans, the costs reflect premium equivalencies, which include company contributions to medical
                                                              accounts such as health reimbursement arrangements (HRAs) and health savings accounts (HSAs), health
                                                              management program costs and program participation incentives paid by the plan, and administration costs.
                                                              In total, nearly 75% of respondents to the Willis Towers Watson Best Practices in Health Care Employer
                                                              Survey participated in the Willis Towers Watson Financial Benchmarks Survey.

                                                                                                                                                        willistowerswatson.com   17
Chapter 2

Improve access to quality, affordable health care: plan design,
network and delivery solutions, and pharmacy cost management
Subsidization and                                         Figure 6. Employers are considering a variety of value-based designs
                                                          Which specific value-based designs or activities does your organization have in place or plan to have in the
plan design                                               next few years?

Value-based design: steering                                                                             17%          4%                                                   25%

employees toward highest-                                                                                                         26%       3%                   14%
quality affordable care
                                                                            7%       3%                                                                    24%

As health care costs continue to rise at a faster pace
than wages or inflation, employers face the challenge                                    12%       3%                                                17%
of changing plan design to control company costs
while keeping health care premiums and out-of-pocket
costs affordable for employees.                                                           13%       3%                                        15%

More employers continue to make stepwise changes in                                       12%     2%                                  12%
implementing value-based designs. By applying design
features or incentives, employers are striving to nudge
their employees toward higher value and efficient care,
                                                                          7% 2%                                                   17%
and away from potentially wasteful services.

ƒƒ
 Today while 17% of employers reduce out-of-pocket                                      11% 2%                                  11%
  costs for the use of high-value services supported
  by evidence, they expect this figure to nearly triple
  (growing to 46%) by 2021 (Figure 6). At the same             3% 1%                               11%
  time, only 7% currently increase out-of-pocket costs
  for use of low-value services that are commonly         1% 1%                         9%
  overused, but in the next two years 34% plan to
  adopt such penalties.
                                                             2%1%                   7%
ƒƒ
 Employers are also actively reviewing
  out-of-network coverage and costs. The number of         Action taken/Tactic used in 2019              Planning for 2020             Considering for 2021

  companies reducing out-of-network reimbursements
                                                          Sample: Companies with at least 100 employees
  or eliminating non-emergency out-of-network             Source: 2019 Willis Towers Watson Best Practices in Health Care Employer Survey
  coverage could more than double by 2021.

                                                                                                                                                                       willistowerswatson.com   18
Figure 7. Has ABHP sponsorship peaked?
        Best practices:
        value-based design                                 +20%
                                                                         One-fifth of companies are expected to only offer employees
                                                                         ABHPs by 2020, compared with 3% a decade ago.
      ƒƒ
       Lower out-of-pocket costs for proven
           high-value services and raise out-of-pocket                                                                                                                                                        85%
                                                                                                                                                          82%                  82%                 84%
           costs for low-value or wasteful services.      Percentage offering or planning to offer an ABHP
                                                                                                                                                                                         81%
                                                                                                                                                                                                             65%
                                                                                                                                                          62%       77%       63%                  65%
      ƒƒ
       Proactively address workplace opioid abuse                                                                                               73%                                      60%
                                                                                                                                                                    57%
           by offering medication-assisted treatment to                                                                              66%       57%
           employees with opioid use disorder.                                                                             59%       54%
                                                                                                      54%        53%
      ƒƒ
       Reduce out-of-network reimbursements.                                                51%                            52%
                                                                                  47%                 50%       48%
                                                                                           48%
                                                                       39%       45%
Account-based health plans                                   33%       36%
Adoption of ABHPs matures                                   31%
Following the steady rise in the use of ABHPs in the
past decade, sponsorship rates appear to be peaking.                                                                                                      20%       20%       19%        21%       19%       21%
Over four-fifths of employers (84%) currently offer an                                                                                         16%
                                                                                                                                     12%
ABHP, up from 54% in 2010 (Figure 7)9 with only a few                                       3%        4%         5%        7%
                                                             2%        3%         2%
more companies planning to add ABHPs for the first
                                                           2006       2007      2008       2009      2010       2011      2012      2013       2014      2015      2016       2017      2018      2019       2020*
time in 2020 (1%), which suggests we have reached a
                                                             Total replacement ABHP               ABHP as option
mature state of ABHP adoption after about 20 years
since their inception. However, many companies are        Note: Based on companies with at least 1,000 employees with or without an ABHP. Years 2007 – 2014 are based on prior years of the Towers Watson survey.
                                                          *Includes companies indicating “Planned for 2020.”
still migrating employees into these programs.            Source: 2019 Willis Towers Watson Best Practices in Health Care Employer Survey

9
    Ibid., 1.

                                                                                                                                                                                            willistowerswatson.com   19
Rethinking total replacement
                                                             Figure 8. Over one-quarter of employers that intended to move to full replacement have decided to maintain plans with
At the same time, employers are stepping back from
                                                             low point-of-care costs
total replacement. Currently, 19% of employers offer                                                                                      A quarter of employers that had full
their employees only ABHPs, a figure that is expected                                         52                                          replacement in place in 2019 intend
to increase a modest two percentage points in 2020.10                                        (18%)                                        to reintroduce plans with low
                                                                                          52                                                                 17%
In fact, the percentage of employers exclusively                                                        (18%)                                                             point-of-care
                                                                                                                                                  55                                 17%costs in 2020 – 2021
offering ABHPs has hovered in the 20% range                                                                               52
                                                                                                                                          55     (19%)
since 2015. Employers are proceeding cautiously
                                                                                                                         (18%)
                                                                                                                                         (19%)                                       17% 8%           25%
and rethinking their ABHP strategies. Over a third                                                                                                 55                          8%          25%
                                                                            289                                                                   (19%)
of employers (37%) that had intended to move to                         289                                                                                                    8%     25%
full replacement have decided to continue offering                                             289

plans with low point-of-care costs (Figure 8). Among
employers that were offering only ABHPs in 2019, a
quarter plan to reintroduce plans with low
point-of-care costs in 2020 to 2021.11
                                                                                                                                                                           MaintainingfullMaintaining
                                                                                                                                                                                             replacement full replacement
                                                                Planned to move toPlanned
                                                                                       total to move to total
                                                                                                         Eliminated Eliminated this
                                                                                                                      this                    Eliminated this
                                                                                                                                           Eliminated     this              Maintaining
                                                                                                                                                                          Intend to eliminatefull
                                                                                                                                                                                                fullreplacement
                                                                                                                                                                                                     replacement in 2020
                                                             Planned to move to totalreplacementEliminated
                                                                                                 as of 2017   this strategy in 2018 Eliminated   this in 2019
                                                                                                                                             strategy                                    Intend      to eliminate    full replacement in 2020
Overall this reassessment of total replacement                   replacement as of 2017                strategy in 2018                   strategy in 2019                Intend
                                                                                                                                                                                 to eliminate
                                                                                                                                                                             Intend             full replacement
                                                                                                                                                                                      to eliminate                in 2021
                                                                                                                                                                                                        full replacement     in 2020
                                                                                                                                                                                      Intend to eliminate full replacement in 2021
                                                             replacement as of 2017               strategy in 2018                strategy in 2019                          Intend to eliminate full replacement in 2021
suggests employers are attempting to address
affordability issues for workers who may be struggling
to afford high deductibles. In doing so, they are putting
                                                             Figure 9. HSA offerings continue to expand, and most companies offering HRAs today plan to continue
employee needs and preferences at the center of their
                                                             Does your organization have an ABHP with an HRA or an ABHP with an HSA?
health care strategy. Employers are also recognizing
that a tight labor market imposes limits on cost shifting.     49%            41%          55%           59%            61%           59%           60%          65%    69%         68%          67%           70%           74%

HSAs continue to grow
Ninety-five percent of employers offered an HSA with
their ABHP in 2019 (including 21% that offered both
an HSA and HRA), an increase of 2% over the prior                             20%
year (Figure 9).12 By comparison, 26% of employers             15%
with ABHPs offered HRAs in 2019, down from 29% in                                          18%
                                                                              39%                        16%            15%           22%           21%
2018.13 HRA use may change in the future with the new          36%                                                                                               21%
                                                                                                                                                                        19%         22%          23%
individual coverage HRA (ICHRA) that employers will                                        27%           25%
                                                                                                                                                                                                               23%           21%
                                                                                                                        24%
be able to offer starting in 2020.                                                                                                    20%           20%
                                                                                                                                                                 13%    12%         10%           9%
                                                                                                                                                                                                                6%            5%
                                                              2007           2008           2009           2010          2011         2012          2013         2014   2015        2016         2017          2018          2019
                                                               HSA only              Offer both             HRA only

                                                             Note: Years 2007 – 2014 are based on prior years of the Towers Watson survey.
                                                             Sample: Companies with at least 1,000 employees
                                                             Source: 2019 Willis Towers Watson Best Practices in Health Care Employer Survey

10
    Ibid., 1.
11
   Ibid., 1.
12
   Ibid., 1.
13
   Ibid., 1.
                                                                                                                                                                                                        willistowerswatson.com        20
Employers cite two key reasons for offering an ABHP
                                                          Figure 10. Education is the primary way to encourage employee contributions
with an HRA: to cover specific pharmacy benefits
(40%) and to better support their low-income              What steps has your organization taken to encourage more employee contributions to the HSA?
population (38%). In addition, slightly over a third of
employers (36%) indicate that they offer an ABHP with                                                                                                                      49%
an HRA because this allows for lower deductibles.

HSAs help employees save for health care                                                                                                                                   49%
expenses on a pretax basis. Employers provide HSA
contributions to help defray point-of-care costs.
Over four-fifths of employers (83%) provide these                                                                                                           43%
contributions by seeding money into the accounts. To
help employees understand how HSAs work and to
                                                                                                                                                      31%
encourage them to contribute to an HSA, employers
are providing year-round education on HSAs through
seminars and counseling (49%), and they are                                                                     19%
educating employees on how HSA funds can serve as
a source of emergency savings (49%) (Figure 10).
                                                                                                14%

   Best practices:
   ABHPs                                                                         9%

  ƒƒ
   Offer an HSA and provide ongoing
                                                                 4%
    education on the value of HSAs.
  ƒƒ
   Carefully evaluate HSA vendors.                        Sample: Based on companies with at least 100 employees that offer total replacement ABHPs
                                                          Source: 2019 Willis Towers Watson Best Practices in Health Care Employer Survey

   Best performer advantage:
   Offer an ABHP as the default plan
          Best         High-cost             Best
       performers      companies       performers’ lead

         41%             20%               +21%

   Best performer advantage:
   Contribute funds to an HSA
          Best         High-cost             Best
       performers      companies       performers’ lead

         75%             61%               +14%

                                                                                                                                                            willistowerswatson.com   21
Participation
                                                         Figure 11. Trends in health care contributions, premiums and benefit designs
Employees continue to focus on wellbeing                 Which specific actions/programs does your organization have in place or plan to have in place for health care
participation requirements. Roughly a third of           contributions, premiums and benefit designs?
employers (34%) will require employees to participate
in other health and wellbeing activities in order to                                                                                   2016          2017       2018   2019      2020*        2021^
receive reduced employee cost sharing, but by 2021
the prevalence of this practice is expected to jump to    Require employees to participate in other                                                                                             52%
                                                                                                                                                                                                52%
52% (Figure 11).                                          health and wellbeing activities to receive                                    32%
                                                                                                                                                      38%       36%    34%         38%
                                                                                                                                                      38%       36%    34%         38%
                                                                                                                                        32%
                                                          reduced employee cost sharing
To avert across-the-board increases, companies
continue to pass the higher cost of family coverage
on to employees. This is especially the case when         Use spousal surcharges (when other employer
                                                                                                                                                                                               43%
spouses have coverage from their own jobs. Roughly        coverage is available)                                                                                31%                            43%
                                                                                                                                        28%           27%              27%        30%
                                                                                                                                        28%           27%       31%    27%        30%
a quarter of employers (27%) charge more to cover
spouses when other employer coverage is available,
with 43% planning to do so in two years.14                Structure employee contributions based on
                                                          employee pay levels
                                                                                                                                        24%           24%       26%    25%         27%         34%
                                                                                                                                        24%           24%       26%    25%         27%         34%

        Best practices: participation
                                                         *Planning for 2020      ^Considering in 2021

      ƒƒ
       Use spousal surcharges when other                 Sample: Companies with at least 1,000 employees
                                                         Source: 2016, 2017, 2018 and 2019 Willis Towers Watson Best Practices in Health Care Employer Survey
           employee coverage is available.
      ƒƒ
       Set contribution levels for employees with
           families higher than for single members.

14
     Ibid., 1.

                                                                                                                                                                              willistowerswatson.com   22
Health care network and delivery solutions
Encourage higher-value, lower-cost delivery options
As employers confront the challenge of lowering
the cost of health care while improving quality, they     Figure 12. Competing organizational priorities is the                      Figure 13. Employers will focus on evaluating network
increasingly embrace strategies that involve paying       biggest barrier for network and provider strategies                        strategy, enhancing navigation and adopting vendor point
                                                                                                                                     solutions
health care providers for outcomes or value rather
than services. Groundbreaking developments across a                         What have been the biggest                                                           16%
range of areas from digital technology to analytics are                     barriers to your organization                                                                      32%
creating opportunities to rethink how and where health                      acting upon the above network                             Mental/                                              43%
                                                                                                                                      Behavioral                                     37%
care is delivered, in the process achieving improved                        and provider strategies?                                  health                                         37%
results at a lower cost. But some employers are finding
that competing organizational priorities (61%) and                                                                                                              14%
                                                                             Competing organizational
administrative challenges (50%) are hindering their
efforts to shift to a value-based health care delivery
                                                             1               priorities                             61%               Metabolic
                                                                                                                                                                 17%
                                                                                                                                                                             27%
                                                                                                                                      syndrome/
model (Figure 12). Addressing these obstacles will help                                                                               Diabetes                                        40%
employers make progress toward improved network
and provider strategies.
                                                            2                Administrative challenges
                                                                                                                   50%                                                                40%

                                                                                                                                                          9%
                                                                             Lack of internal resources
                                                            3                                                      49%
                                                                                                                                                                       21%
Companies plan to focus on specific clinical
                                                                             to support the change                                    Musculoskeletal
                                                                                                                                                                         26%
conditions — in particular, mental/behavioral health,                                                                                                                          31%
metabolic syndrome/diabetes, musculoskeletal                       Ongoing expenses                                   35%                                                                        50%
and cancer — to improve member health and cost
savings. To target these conditions, they will focus               Initial start-up expenses                          26%                               6%

on evaluating network strategy along with improving                                                                                                                   20%
                                                                   Difficulty in working with                                                                                28%
navigation and adopting vendor point solutions                     health plans to implement
                                                                                                                      22%             Cancer/
                                                                                                                                                                  19%
(Figure 13).                                                                                                                          Oncology
                                                                                                                                                                                                       56%
                                                                   Lack of qualified vendors                           15%
                                                                                                                                                        5%
                                                          Sample: Companies with at least 100 employees
                                                          Source: 2019 Willis Towers Watson Best Practices in Health Care Employer                              15%
                                                          Survey                                                                                                       23%
                                                                                                                                      Cardiovasular
                                                                                                                                                                  20%
                                                                                                                                                                                                         60%

                                                                                                                                                                 16%
                                                                                                                                                                14%
                                                                                                                                      Maternity/                       21%
                                                                                                                                      Infertility                       23%
                                                                                                                                                                                                         60%
                                                                                                                                      Revise medical benefits            Evaluate network strategy
                                                                                                                                      Enhance navigation                Adopt vendor point solutions
                                                                                                                                      None

                                                                                                                                                                                      willistowerswatson.com   23
Employers are focused on a range of value-based
                                                   Figure 14. Employers seek interventions across the delivery of care
services across all stages of care delivery from
prevention to return to work (Figure 14).          Prevention
                                                   Offer onsite/worksite health promotion activities
                                                                                                                                     61%         9%           11%

                                                   Offer an onsite health clinic
                                                                        20%      2%       9%

                                                   Offer a near-site or multiemployer health clinic
                                                      7%      2%           13%

                                                   Network/Steerage
                                                   Offer high-performance networks
                                                                 16%        4%                                          33%

                                                   Reduce employee share of premiums or point-of-care costs for high-performance network plans
                                                         9%        3%                            25%

                                                   Surgical care
                                                   Use centers of excellence within the health plans
                                                                                                            45%            5%                       24%

                                                   Offer an expert medical opinion program
                                                                          22%             8%                            21%

                                                   Hire a third party to replace a carrier for concierge services with integrated care management programs
                                                     7%       4%                      20%

                                                   Use centers of excellence through a carve-out vendor
                                                    5%     2%                 18%

                                                   Return to work
                                                   Design policies and programs to include stay at work and early return to work following disability
                                                                                                                              55%          7%     10%

                                                    Action taken/Tactic used in 2019                   Planning for 2020            Considering for 2021
                                                   Sample: Companies with at least 100 employees
                                                   Source: 2019 Willis Towers Watson Best Practices in Health Care Employer Survey

                                                                                                                                                                    willistowerswatson.com   24
Onsite health promotion activities and health clinics.                           Recognizing the growing ranks of employees who                      chronic conditions to preventive screenings, without
In an effort to encourage healthy behaviors, a majority                          have to balance caregiving and work responsibilities,               having to take extensive time off from work. In a
of employers (61%) offer onsite health promotion                                 an increasing number of employers offer elder care                  competitive labor market, onsite and near-site clinics
activities, a number that could grow to over 80%                                 support services (24% today growing to over 40%                     give employers an edge in attracting and retaining
by 2021. Over two-fifths of companies (41%) have a                               by 2021) and childcare support services (26% today                  top talent. These clinics benefit employers by giving
national strategy for these activities while 38% employ                          growing to 39% by 2021).                                            them greater control over costs, and helping avoid
a narrower market-specific strategy in a single or a few                                                                                             unnecessary and costly emergency room visits. Onsite
locations (Figure 15). In addition, over half of employers                       Employers are expanding their use of health clinics                 centers can also allow selective referral to
(54%) provide onsite biometric screening and another                             both onsite (20% today growing to 31% by 2021)                      higher-value specialists. The majority of companies
11% are considering adding it in the next two years.                             and near-site (7% today growing to 22% by 2021).                    make targeted use of onsite (76%) and near-site
                                                                                 Such clinics make it convenient for employees to                    clinics (78%), employing a market-specific strategy in
                                                                                 get care, which can range from help managing                        a single or few locations.

  Figure 15. Employers report targeted use of onsite and near-site health clinics

                                                                                                                                            Near-site or                      Onsite/Worksite
        High-performance                                     Centers of                                    Onsite health                multiemployer health                  health promotion
            networks                                         excellence                                       clinic                           clinic                             activities

                                                                                                  Offering rate in 2019

                 16%                                           46%                                             20%                                7%                               61%

                                                                                                                   76%                              78%
                                                          71%

                                                                                                                                                                                   41% 38%
            38% 36%

                           23%
                                                                                                                                                                                               19%
                                                                                                                                              18%
                                                                  12% 13%                                  12%             11% 4%                         3%    3%
                                    5%                                            6%                                                                                                                   8%

            Have a national strategy               Have a market-specific strategy in a single or few location(s)                   Have a market-specific strategy in many locations        Other
  Sample: Companies with at least 100 employees   Source: 2019 Willis Towers Watson Best Practices in Health Care Employer Survey

                                                                                                                                                                                         willistowerswatson.com   25
30%
                                                                                                                                                         22%

ƒƒ
 Telebehavioral health services. Employers are
                                                              Figure 16. Growing attention among employers to offering high-performance and expert medical opinion programs
      increasing their focus on mental health by offering                                                                         2019               2020*                2020ˆ
      coverage for telebehavioral health services. While
      slightly more than half of companies (54%) offered            Offer high-performace networks                                                 Use centers of excellence within the health plans

      this coverage in 2018, almost three-quarters (73%)
                                                                                                                                                                                                   74%
      do so today, and this number is expected to rise to
      89% by 2021.15                                                                                                          52%                                          50%
ƒƒ
 Centers of excellence. COEs (growing from 45%                                                                                                           45%
      today to 74% by 2021) are reaching a critical mass
                                                                       16%                        20%
      of employees. Roughly three-quarters of employers
      (71%) employ a broad, national COE strategy. Most
                                                                       2019                      2020*                      2020ˆ                    2019                 2020*                  2020ˆ
      companies currently work with their health plans to
      establish COEs. While a small number of employers
                                                                   Offer an expert medical opinion program                                         Reduce employee share of premiums or point-of-care
      (5%) contract with a carve-out provider for COEs,                                                                                           costs for high-performance network plans
      the prevalence of this practice is expected to jump
      to 25% by 2021.
ƒƒ
 High-performance networks. Employers expect                                                                                  51%
      that their use of HPNs, which provide access to                                                                                                                                              38%
      a narrow network of higher-value and lower-cost                                             30%
                                                                       22%
      providers, will expand significantly from 16% today                                                                                                9%                 13%
      to 52% by 2021 (Figure 16). As the use of HPNs
                                                                       2019                      2020*                       2020ˆ                       2019             2020*                   2020ˆ
      grows, more employers will reduce the employees’
      share of premiums or point-of-care costs. Currently,    Note: *“Planning for 2020”; ^“Considering in 2021”
                                                                    Use centers     of excellence     within  the health plans
      a mere 9% of companies that offer HPNs reduce           Sample: Companies with at least 100 employees
                                                              Source: 2018 and 2019 Willis Towers Watson Best Practices in Health Care Employer Survey
      these premiums and costs, but by 2021 that figure                                                                       74%
      could rise to 38%.
                                                                                                  50%
      No one approach to HPN strategy dominates, with                  45%
      38% of companies employing a national strategy
      and 36% a market-specific strategy in a single or a
      few locations.
                                                                       2019                      2020*                      2020ˆ
ƒƒ
 Expert medical opinion programs. Another growing
      trend is the use of expert medical opinion programs,         Reduce employee share of premiums or point-of-care
      which helps ensure best-in-class care and better             costs for high-performance network plans
      health outcomes. Less than a quarter of employers
      (22%) offer this service today, but its prevalence is
      expected to more than double in two years.
                                                                                                                              38%

                                                                        9%                         13%

15
     Ibid., 1.                                                         2019                      2020*                       2020ˆ

                                                                                                                                                                                      willistowerswatson.com   26
ƒƒ
 Vendor/carrier strategy. Employers continue to
                                                           Figure 17. Companies examine a broad set of priorities when selecting health insurance carriers
  select vendor partners, including insurance carriers,
  based on a broad set of priorities (Figure 17). Almost    Offer an effective, high-end concierge service model
  all employers (95%) select carriers based on the                                                               42%                                                                   58%
  competitiveness of their network access and of
  their negotiated provider discounts. Companies also       Availability of high-performance networks
  value the effectiveness of the vendor's use of data,                                                                            53%                                                   47%
  analytics and reporting as well as the integration
                                                            Availability of centers of excellence
  of data, systems and/or customer service across
                                                                                                                                             59%                                         41%
  medical, pharmacy and/or mental/behavioral health.
                                                            Support for modernization of benefits to support your organization's diversity and inclusion agenda
                                                                                                                                              60%                                       40%
   Best practices:
   health care delivery                                     Extent vendor has incorporated reimbursement methodologies based on cost, quality, improved efficiency and better outcomes
                                                                                                                                                    65%                                 35%
  ƒƒ
   Use high-performance networks to
    deliver higher value at lower cost.                     Effectiveness of protecting members from surprise bills

  ƒƒ
   Offer onsite or near-site health clinics.                                                                                                          67%                               33%

  ƒƒ
   Provide coverage for expert medical opinion             Integration of data, systems and/or customer service across medical, pharmacy and/or behavioral health
    programs.                                                                                                                                               73%                          27%

   Best performer advantage:                               Effectiveness of the vendor's use of data, analytics and reporting to manage the care, cost and wellbeing of members
   Use COEs within health plans
                                                                                                                                                            74%                          26%
         Best          High-cost            Best
      performers       companies      performers’ lead
                                                           Willingness to partner with other vendors
        58%              38%              +20%                                                                                                                77%                        23%

                                                           Effectiveness of the vendor's use of data, analytics and reporting to manage the care, cost and wellbeing of members
   Best performer advantage:                                                                                                                                        84%                   16%
   Offer coverage for telebehavioral health service
         Best          High-cost            Best           Competitiveness of the negotiated provider discounts
      performers       companies      performers’ lead
                                                                                                                                                                                 95%        5%

        84%              66%              +18%
                                                           Competitiveness of the vendor's network access
                                                                                                                                                                                 95%        5%

                                                            “Important” or “Extremely important”  Planning for 2020

                                                           Sample: Companies with at least 100 employees
                                                           Source: 2019 Willis Towers Watson Best Practices in Health Care Employer Survey

                                                                                                                                                                          willistowerswatson.com   27
Pharmacy management
Targeting specialty drug costs and utilization
Employers cite pharmacy costs as one of their most
                                                       Figure 18. Employers proactively manage pharmacy benefit costs
challenging priorities. Companies are proactively
                                                       Evaluate and address specialty drug costs and utilization performance through the medical benefit
examining and leveraging a range of options to
                                                                                                                             49%                         17%                19%
manage the relentless rise of pharmacy spend driven
primarily by increased specialty drug costs.           Evaluate plan design incentives/requirements to promote use of lower-cost biosimilars in your formulary or plan design, when available
                                                                                                30%             10%                                        30%
The top strategies planned or under consideration to
address rising specialty pharmacy spend include:       Implement coverage changes to influence site of care for specialty pharmacy instead of through your medical benefit
                                                                                21%              7%                                      26%
ƒƒ
 Adopting more comprehensive solutions.
  Companies are looking to adopt a comprehensive       Require mandatory mail for maintenance medications
  approach to address the high and rising costs                                                  31%          6%                     15%
  of specialty drugs, which are paid for both by
  pharmacy benefit administrators and health plans.    Adopt a high-performance formulary with very limited brand coverage across the therapy classes

  Almost half of employers (49%) report they are                               19%         5%                        18%
  extending their evaluation and management of
                                                       Adopt point-of-sale rebates through the pharmacy benefit manager (PBM) and pass them through to individual members at the time of purchase
  specialty drug costs and utilization performance
                                                              10%          6%                                 23%
  to drugs covered under the medical benefit, a
  figure that is anticipated to increase to 85% by     Follow Institute for Clinical and Economic Review (ICER) recommendation regarding drug coverage based on cost-effectiveness
  2021 (Figure 18). It remains to be seen how future         9% 2%                      15%
  health care mergers that may combine a health
  insurance payer, pharmacy benefit manager (PBM)      Implement a narrow retail network
  and national retail pharmacy network could impact          8%     2%               12%
  specialty drug cost management in the future.
                                                       Have a contract with a PBM based on an acquisition cost-plus model
                                                            7%    2%               14%

                                                       Engage in direct contracting with pharma, retail and/or specialty pharmacies to secure improved drug pricing
                                                            7% 2%              10%

                                                       Carve out the utilization management review process to a third party other than the PBM
                                                             8%     2%          9%

                                                       Consider a new form of PBM contracting that may include guaranteed fixed per-member per-year cost every year
                                                        1%               13%
                                                       2%

                                                        Action taken/Tactic used in 2019              Planning for 2020        Considering for 2021
                                                       Sample: Companies with at least 100 employees
                                                       Source: 2019 Willis Towers Watson Best Practices in Health Care Employer Survey

                                                                                                                                                                        willistowerswatson.com   28
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