It shouldn't come as a shock that
After surveying 1,800 employers, financial services company Mercer estimates that employees will have to cover an additional 5.8% of their
"We're in this vicious cycle where costs are rising, [employers] are shifting them to the worker, which prevents them from getting care or accessing the system, which leads to longer-term, worse healthcare needs," says Ashok Subramanian, co-founder and CEO of Centivo, a health plan provider for self-funded employers. "You're catching cancer later, diabetes is going unchecked, and then costs go up. Employers need to look for solutions they haven't considered in the past."
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Subramanian warns employers against waiting out the trend—there's little optimism that costs will decrease anytime soon. And this doesn't even take into account Donald Trump's presidential win, with the president-elect vowing to end the Affordable Care Act. Between staffing shortages and increases in service demand as the U.S. population skews older, healthcare costs are already in a precarious position. Drug benefit costs are especially worrisome, with employers seeing a 7.2% rise in prices in 2024, according to Mercer.
While mitigating costs within the confines of a for-profit healthcare system is no easy feat, Subramanian is confident that if employers emphasized preventative care, they could save themselves and their employees money.
"To create a truly sustainable healthcare system that involves insurance, we really have to change how people access and consume care," he says. "We really believe in the concept of advanced primary care as the access point, so people have long-term relationships with their primary care physician."
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Advanced primary care includes annual check-ups, screenings, and immunizations, as well as behavioral health management, care navigation and pharmacy needs. Subramanian notes that if employees are incentivized to see their primary care physician (PCP), then there's a higher likelihood that chronic conditions can be prevented or managed before becoming more expensive to treat. Ideally, employers' health plans should ensure there are no financial barriers to seeing a PCP, virtual appointments are encouraged when possible and PCPs are prepared to help patients find an in-network, quality specialist if necessary.
For Subramanian, it's crucial for health plan members to have a doctor they trust without fearing a bill will keep them away.
"If you have a doctor that you trust telling you to go get a mammogram or a colonoscopy, you're going to do it," he says. "If you don't have any kind of a relationship with them, it's easy to just put those things off."
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Centivo's plans seem to prove this approach, with an estimated 30% increase in primary care visits among its members and a 15% reduction in ER visits, according to Subramanian. But Centivo goes further than free primary care: They have no deductibles and clear co-pays for healthcare services.
Subramanian encourages employers to fight for more control over what their health plans look like, regardless of whether they are self-funded or not. This may mean benefit leaders reviewing primary care utilization, ER visits and the potential rise in chronic health conditions among their workforce. Depending on what they find, Subramanian suggests that employers reconsider whether their health plans encourage engagement or make employees sicker. If it's the latter, employers know they can't afford to stick to the same approach.
"Look at your investment in primary care," says Subramanian. "If you look at all the other non-privatized healthcare systems in the world, primary care is the access point. That's where we have to get to in the U.S."
