U.S. employers taking action to keep health care cost increases to just 4% in 2016

Nearly four in five employers (78%) project moderate to significant changes in their health plan designs and vendor strategies over the next four years, according to a survey of U.S. employers by leading global advisory, broking and solutions company Willis Towers Watson (NASDAQ:WLTW). After these expected changes, which are intended to manage health care costs and improve their plans’ value, employers anticipate cost increases in 2016 to be around 4% (for the second consecutive year), the smallest increase in 15 years but more than twice the Consumer Price Index.

Notably, the Willis Towers Watson 2016 Emerging Trends in Health Care Survey found that more than two-thirds of employers (70%) said the two-year delay in the implementation of the Affordable Care Act’s excise tax on high-value health plans will have a small or negligible impact on their health care strategies for 2017.

“Employers are motivated primarily by the desire to manage cost growth and improve the value of the plans they deliver,” said Randall Abbott, senior health and benefit strategist, Willis Towers Watson. “As they consider a wide range of options, they are implementing changes that not only lower the rate of cost increases but also achieve better health outcomes and improve the patient experience.”

A number of the survey’s findings provide examples of options employers are adopting in greater numbers:

• Telemedicine. Electronic physician visits are rapidly becoming ubiquitous: 67% of employers offer them today; by 2018, that number could increase to 90%.
   
• Centers of excellence. The utilization of medical providers that specialize in particular clinical services is growing dramatically: 31% of employers are using them today; by 2018, that number could grow to 73%.
   
• High-performance provider networks. Networks of providers that partner with employers and health plans to offer lower premiums and better value offered alongside broad networks are becoming more popular: 13% offer the option today; by 2018, that number could rise to 56%.
   
• Onsite or near-site health centers. Employer-owned or -sponsored workplace health centers remain appealing: 22% of employers have one or more today; by 2018, that number could grow to 40%.
   
• Technology to improve employee engagement. Decision-support tools and other engagement technologies are growing in popularity: 52% of employers currently use technology to enable employees to make better plan selections; another 37% could follow in their footsteps by 2018.

“No single action employers can take will achieve all of their organizational health care goals,” said Trevis Parson, senior consultant, Willis Towers Watson. “Instead, employers are continually evaluating a broad range of existing and emerging strategies to achieve optimal outcomes in any given year.”

About the survey

The Willis Towers Watson 2016 Emerging Trends in Health Care Survey was fielded in January and February 2016. The survey yields insights into how employers are thinking about health care benefits and the key actions they anticipate taking over the next three years. The 467 employers that responded represent 12.1 million employees and are midsize to large companies across a variety of industries.

About Willis Towers Watson

Willis Towers Watson (NASDAQ:WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 39,000 colleagues in more than 120 countries. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas — the dynamic formula that drives business performance. Together, we unlock potential. Learn more at willistowerswatson.com.