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The 24th Annual Willis Towers Watson Best Practices in Health Care Employer Survey
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
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.
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
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
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
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
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
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
Enhancing the enrollment experience diverse needs and use the resulting insights to craft
proposition. This involves emphasizing workplace
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:
Adding more choice in all benefits
experience, employers will unlock opportunities to
paid parental leave beyond what is required by law,
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 4Identifying 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
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
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 5About 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 Energyand 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
10,000to10,000
24,999to 24,999
GeneralServices
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 6Findings 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 7Findings 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 8Highlights
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 9Integrated 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 10Employee 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 11Chapter 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 12Facing their own rising costs, employers will continue These include: Confidence continues to rise
to look for ways to mitigate the impact of cost
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
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.
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 13Identifying 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
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
Health culture. Employers are committed to
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%
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 15Best 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
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
Family size: The estimated number of members
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.)
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
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%).
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 16What 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:
Participation
Employee and dependent
Subsidization
Program design value and subsidy level
Efficiency
Vendor partner strategies
Health care delivery
Pharmacy management
Workforce health
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 17Chapter 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.
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%
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 18Figure 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.
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%
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%
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 19Rethinking 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
MaintainingfullMaintaining
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 20Employers 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%
Offer an HSA and provide ongoing
4%
education on the value of HSAs.
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 21Participation
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
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.
Set contribution levels for employees with
families higher than for single members.
14
Ibid., 1.
willistowerswatson.com 22Health 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 23Employers 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 24Onsite 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 2530%
22%
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%
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.
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
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
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%
Use high-performance networks to
deliver higher value at lower cost. Effectiveness of protecting members from surprise bills
Offer onsite or near-site health clinics. 67% 33%
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 27Pharmacy 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%
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 28You can also read
