5 health care trends impacting employers in 2023

As the new year begins, employers have their hands full. Not only is a looming recession top-of-mind,1 the competitive labor market is forcing many employers to do more with less. The demand for higher salaries and better benefits are making it increasingly difficult to attract and retain talent, and other dynamics within the health care industry are adding to the challenge.

1.  The concern around health care costs amid economic uncertainty

Health care costs continue to rise, and the economy isn’t helping. A 2022 report found that health care costs increased 3.2% in 2022, and employers are bracing for an even bigger increase at 5.4%.2 Another survey revealed that 7 in 10 employers expect their health care costs to rise moderately or significantly over the next 3 years, which likely contributes to the fact that more than 50% of respondents expect their costs to be over-budget in 2023.3

What does this mean for an employer’s health care strategy? Today’s competitive labor market, coupled with economic uncertainty, has many employers looking for ways to contain their costs without having to sacrifice the quality of coverage they offer their employees. Learn how UnitedHealthcare is supporting employers through strategic cost management.

As we enter this time of heightened economic uncertainty, the ability to control costs from a health care perspective is going to become more and more important.

— Craig Kurtzweil, Vice President of the Center for Advanced Analytics at UnitedHealthcare

2. The “return to health” phenomenon

During the pandemic, some Americans put off preventive care appointments and procedures. But 2022 UnitedHealthcare claims data shows that members are making a “return to health,” as many are back to scheduling appointments with their primary care providers and getting routine tests like colonoscopies and mammographies at levels in line with pre-pandemic years.4

What does this mean for an employer’s health care strategy? While the “return to health” could initially mean higher medical costs, the long-term benefits of preventive care may result in better health outcomes and lower overall costs. For instance, routine appointments and screenings may help catch conditions early that could be treated in a more successful and cost-effective way.

3. The need for more behavioral health support

It pays to have happy employees, but recent research finds that frequent mental distress has increased among adults.5 In fact, according to America’s Health Rankings 2022 Annual Report, the prevalence of frequent mental distress increased 11% among adults between 2020 and 2021.5 That’s concerning in more ways than one. Employees with unresolved depression may experience a reduction in productivity, which may also affect their employers’ profitability and the wider economy. On the other hand, a 2019 study from Oxford University found that happy workers are 13% more productive.6

What does this mean for an employer’s health care strategy? More employers will be looking for benefits that integrate medical with behavioral and give their employees improved access to behavioral health services. For example, UnitedHealthcare is focused on expanding its network of behavioral health care providers and enhancing its virtual behavioral health support. Discover the ways UnitedHealthcare is advancing behavioral health.

4. The (continued) rise of specialty drugs

Enormous investments continue to be made in pharmaceutical research and development. From 2014 to 2022, the industry has seen a 78% increase in the number of available drugs.7 But the cost of specialty drugs has continued to grow with it. In 2021, the total cost of specialty drugs amounted to $301 billion, an increase of 43% since 2016.8

What does this mean for an employer’s health care strategy? Employers are looking for strategies that can help them better manage their pharmacy care costs. One way UnitedHealthcare does this is by putting the data and tools into the hands of employees and their providers to help steer them to more cost-effective drug alternatives, when applicable. Learn how UnitedHealthcare is working to make pharmacy and specialty drugs more affordable, such as by eliminating out-of-pocket costs on certain, vital prescription drugs.

High prices are a significant barrier to prescription drugs for many people, so we are using our unique capabilities to deliver savings for consumers. We are doing what we can to shield people from the prices set by pharmaceutical companies and hope all stakeholders also will act to make prescription drugs more affordable.

— Brian Thompson, Chief Executive Officer of UnitedHealthcare

5. The potential end of the public health emergency (PHE)

Another trend employers are keeping an eye on is the end of the PHE, which was established by the federal government in January 2020 due to the 2019 novel coronavirus outbreak. When the PHE is lifted, about 18 million Americans9 who received Medicaid coverage during the pandemic will be reevaluated or “redetermined” – over a 14-month period on a state-by-state basis – as to whether they’re still eligible for Medicaid or whether they will need to seek health care coverage through their employer or on the individual exchange. Early industry research shows that about 40% will become eligible for employer-sponsored coverage.10

What does this mean for employers? Since more employees may be seeking another insurance option, employers should prepare for 1) an influx of questions about “redetermination” from their employees and 2) the financial impact of enrolling more employees in their benefits.

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