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Cancer has overtaken musculoskeletal conditions as the top driver of large companies’ healthcare costs, according to the latest survey from the nonprofit Business Group on Health.

The 2023 Large Employers’ Health Care Strategy and Plan Design Survey found 13% of employers said they have seen more late-stage cancers and another 44% anticipate seeing such an increase in the future, likely due to pandemic-related delays in care.

The research, which surveyed 135 large employers representing some 18.3 million covered employees, gathered key plan design and healthcare cost data to create aggregate findings on employer-sponsored healthcare for the coming year.

“Survey findings function as a ‘collective snapshot’ that can guide employers as they determine how to maximize employee benefits,” said Ellen Kelsay, president and CEO of Business Group on Health. “Employers shared that they are deeply concerned about unsustainable health care costs, the devastating effects of the pandemic on employee health, and the need to work creatively with their partners toward a more positive and sustainable health care experience, among other issues.”

Other survey findings include:

  • After experiencing no increase in actual healthcare costs from 2019 to 2020, employers experienced a significant return to rising costs, with a median 2021 cost increase of 8.2%.
  • Despite rising costs, employers expect to cover 82% of the cost of employee coverage in 2022, up from 80% the year before. Employers have been reluctant to shift costs to employees in the short-term and are looking at fundamental delivery system reforms, such as advanced primary care and centers of excellence for specific health conditions, to address unsustainable health care expenses and prescription drug costs.
  • Overwhelmingly, large employers (99%) are concerned about prescription drug prices. In 2021, prescription drugs accounted for a median of 21% of employers’ healthcare costs, with more than half of pharmacy spend going to specialty medications.
  • Long-term mental health issues, both observed and anticipated, are the leading health-related impact of the pandemic, employers said, with increases in medical services due to delayed care a close second. Some 43% have already seen this trend and another 39% anticipate such increases. In response, employers plan to keep many pandemic-related health and well-being offerings in place for the foreseeable future.
  • Virtual health is at a crossroads, warranting further assessment and refinement. While three-quarters of employers (74%) believe that virtual health will significantly impact future health care delivery, 84% said integrating virtual health and in-person care delivery is critical for success. If integration does not occur, it could lead to the duplication of services, unnecessary care, wasteful spending and a fragmented care.
  • Health equity continues to be top of mind for employers, with three in four sharing concern about inequities in their company’s health and well-being initiatives. Most employers plan to address such issues in 2023, and plan to tackle additional social determinants of health, including racism, and across such areas as childcare, transportation, and food access/insecurity, in the years 2024 and 2025.