Plan costs to rise 130% by 2025 predicts MercerBy The IJ Staff | May 16 2017 11:30AM
Mercer, a global consulting company, today predicted that employers’ health benefit costs will increase by 130% by 2025 due to expensive specialty drugs, higher rates of chronic and mental illness, increased fraud and rising health pooling costs.
In announcing this forecast on May 16 at its inaugural Future of Healthcare: Evolution to Revolution event series, Mercer underlined that solutions are available to address increasing healthcare benefit costs.
Targeted services and communications
Mercer suggests ways that employers can do this include developing relationships with specialty vendors “to provide targeted services and communications, better access to healthcare practitioners, and better manage costs.”
It also says employers must begin to shift from a traditional group benefits model. “The traditional model is not responsive to consumer demand. Younger and more tech-savvy workers want customizable plans that match their unique healthcare needs,” says Mercer, adding that voluntary benefits, “including a defined contribution model and taxable and non-taxable healthcare spending accounts, are a promising method of cost control.”
Leveraging data can allow for “truly personalized benefits,” adds Mercer. For example, this may include data gathered via wearable technology and demographic information. As this area of healthcare science develops, employers must be prepared to offer employees “an optimal benefits plan, based on data, to improve employee engagement with benefits,” advises Mercer.
“As costs rise, employers need to step up to remain competitive,” says Brian Lindenberg, Partner and leader of Mercer Canada’s Health Practice. “This means embracing the personalization of benefits enabled by technology, leveraging innovative funding models, and offering more flexible plans in keeping with the needs of a more diverse and ever-changing workforce.”
He adds that with the healthcare space undergoing unprecedented technological and demographic change, “status-quo solutions offered by the market today will not meet the needs of tomorrow’s workforce.”