According to professional services firm Aon, the average cost of healthcare for their own employees will increase by 6.5% next year. This is a significant increase from the 3.7% uptick seen in 2022. This cost increase is similar to other cost increases mentioned here and likely due to the increased willingness of Americans to go in-person for testing and treatment now that the pandemic has subsided.
Cancer Is the Main Driver of Increasing Healthcare Costs
Cancer has been named the top driver of employer healthcare costs, replacing musculoskeletal conditions. In the Business Group on Health survey, 13% of employers stated that the incidence of late-stage cancers among their employees has increased, while 44% expect to see more cancer diagnoses in the future.
This is mainly because approximately 64% of Americans avoided cancer screenings in 2021 due to the challenges of the pandemic. With more people resuming in-person care, employers must now address the rising costs associated with managing the consequences of delayed screenings and care.
Considering that the average cost of cancer treatment is around $42,000 in the year after its diagnosis, according to the National Cancer Institute, the costs associated with cancer care will be a significant financial burden for employers in 2023.
Specialty Drugs a Significant Contributor to Rising Prices
According to the U.S. Department of Health and Human Services, specialty drugs have been on the rise in recent years, increasing by 43% since 2016. These drugs accounted for over 50% of total drug spending in 2021. Specialty drugs are typically used to treat complex, chronic diseases such as cancer and autoimmune disorders.
In response to these trends, employers are looking for different PBM partners and more transparent relationships to help manage drug costs. Employers should also consider exploring benefit designs that focus on better cost management for specialty drugs, such as tiered pricing, active formulary management and alternate funding strategies
For more Employee Benefits information, contact INSURICA today.
Copyright © 2023 Smarts Publishing. This is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.