Medical Cost Trend: Behind the numbers 2020
PwC Health Research Institute (HRI)
Condensed and presented by Advanced Plan for Health
The Advanced Plan for Health team regularly scans the health market for trends, analysis and insight. In our research, we found The PwC HRI Medical Cost Trend: Behind the Numbers 2020 report to be full of valuable healthcare market information and thought our readers would benefit from the report findings. We decided to condense and present the PwC HRI report in a bi-weekly blog series to highlight what we found to be most pertinent to our readers and to better understand factors that could potentially affect the 2020 medical cost trend. Below is Session #9 The health and wellness long game, per the PwC Health Research Institute (HRI) report.
Session #9 The health and wellness long game
For decades, employers have invested in health and wellness and prevention, yet participation remains low, according to a recent consumer survey conducted by HRI (see Figure 15). Also, despite the ubiquity of these programs, 29% of individuals with employer coverage surveyed by HRI said these programs were not offered to them in the last two years.110 Those who participate in their employers’ health and wellness programs generally believe the programs have had a positive impact on their health.
As employers consider modifying their existing health and wellness programs or implementing new ones, they might consider the following:
Focus on populations
Employers that have seen positive results have taken a data-driven approach to the design, tracking and measurement of programs targeted for their specific population. HRI’s survey of consumers found that those with chronic or complex chronic conditions were more likely to say the programs they’ve participated in have had a positive impact.112 These groups participated in health and wellness programs at a higher rate than healthy groups.
Invest in programs that work ‘behind the scenes’
So many health and wellness programs require action on the employee’s part, making it hard for employers to get buy-in and participation. Some companies are innovating by focusing on strategies that require less action by the employee. For example, Merck changed its cafeteria environments to encourage employees to buy healthy foods through food labeling, reductions in sweet beverages and smaller ladle sizes for unhealthy dressings in the salad bar.113 Healthy food prices have been reduced by 20% at one location; results suggest employees are eating more healthy food.
Show employees how it changes their lives
“Employers have been down the wellness road for 20 to 30 years with limited results,” said Ken Beckman, vice president and actuary at Omaha, Nebraska-based Central States Indemnity, in an interview with HRI. “You have to make it clear to the employee that lifestyle medicine is not just another wellness program. Here is a way for you to reverse your diabetes and get off your medications, for example. Be clear in what you want them to do and what the results could be.”
As employers explore new ways to achieve an ROI on their health and wellness programs, they should also find ways to communicate success stories from other employees to improve participation.
Measure success broadly
Employers should think about their future investments in health and wellness in terms of broader benefit costs, including the impact that changing employee behaviors can have not just for the company’s health costs but also its short-term disability, long-term disability and life insurance costs. Dr. David Levy, CEO of EHE Health, a preventive medicine company stated, “You can be defensive of cost and pay on the back end, or you can invest on the front end and reap the rewards of health, productivity and longevity that come about. Spend better early, instead of more later.”
Let wellness programs double as a recruiting tool
Health and wellness programs can change the outlook of employees toward their employers and attract future employees. Merck executives have an annual dashboard giving them insights into the overall health and well-being of U.S. employees, including the percentage of employees considered at high health risk levels. The dashboard helps assess how health and well-being improvement initiatives are aligned with C-suite objectives.116 Two years following implementation, employees’ survey results showed a significant increase in the belief that senior leadership cares about their health and well-being.
With all that is stated in this recap concerning the health and wellness long game, each employer needs access to data that will allow them to determine the unique inflators and deflators that are driving their cost trend. In turn this will enable the development of strategies that provide a path to intervene at the point of risk and mitigate its impact, e.g. benefit design considerations, care management effectiveness, and others. To learn more about this research, feel free to contact us here.
PwC HRI Sources
(110) PwC Health Research Institute consumer survey, spring 2019.
(112) PwC Health Research Institute consumer survey, spring 2019.
(113) PwC Health Research Institute interview with Virginia Peddicord, Employee Population Health Director at Merck, on April 5, 2019.
(116) PwC Health Research Institute interview with Virginia Peddicord, Employee Population Health Director at Merck, on April 5, 2019.