As a large employer with over 20,000 employees, we face many of the same challenges you do — competing for talent, reskilling and upskilling our current talent, and managing the impact of health care cost trends. And as a major health care company, we work hard to expand access to quality, cost-effective health care and equip our members — including our own employees — with information and tools to help them and their families become better health care consumers.

We also pay close attention to data — including member and employer feedback, the latest trends and analysis of our costs and outcomes — and we use that information to help us develop offerings that make it easier for you to make the right health care decisions for your own employees.

We realize the importance of ongoing dialogue, so each quarter we use our Employer Pulse survey to determine the concerns of our largest group customers, the health care strategies they have in place, or approaches they are considering. This helps us come to the table with ideas that provide value in a market-leading way to meaningfully impact the health of employees, evolve how we communicate, and design new products and services.

Each of our employer panelists are from companies with 5,000 or more employees and represent over 3 million employees. In 2018, we explored several key areas — from the impact of mergers and

acquisitions on the cost and quality of care to how employers are coping with the rising need for behavioral health resources for employees and the impact of the opioid crisis. For instance, we now know that both good and bad health outcomes impact engagement, productivity, performance, and, ultimately, business results.

The Health & Benefits Report can help you better understand what your peers are looking for in plan design and provides key insights on what is on the horizon. We look forward to the next chapter together.

Nazneen Razi

Senior Vice President and Chief Human Resources OfficerBlue Cross and Blue Shield of Illinois, Montana, New Mexico, Oklahoma and Texas

How Employers are Adapting

The Next Chapter

What’s Working

Employers are increasingly focused on making sure they offer their employees quality care at an affordable cost. Determining the best benefits requires the consideration of many factors.

By 2026, annual health care spending is projected to reach an

estimated $5.7 trillion, a total that would equate to nearly 20

percent of the U.S. economy.* Employers are shifting toward

greater engagement within the health care delivery system to

drive better outcomes and cost reductions. In alignment with this

growing concern, we wanted to explore where they have shifted

their plan design strategies. Specifically, we took a closer look at network options, how employers

are providing greater access and measuring the health of their employees. Collectively, the

responses provided a clearer picture of their current and future

plans for combating the rising cost of care.

What We HeardMany employers are gravitating to advocacy services that help members navigate their benefits and care. With this approach, customer advocates can guide employees and even, in some cases, help them earn a reward for choosing a lower-cost provider. When it comes to network options, many employers consider PPO and Centers of Excellence/specialty care important in considering a carrier**.

The Impact of Collaboration

Nearly half of employers expect mergers and acquisitions, a growing industry topic, to improve coordination of care. But 40 percent expect the cost of care to be negatively impacted by them.

What’s NextEmployers will continue their heightened interest in concierge and advocacy care models, with 83 percent either currently using or considering them. Additionally, 71 percent are using telemedicine, while another 19 percent are considering.

The growth of PPOs also will continue along with Centers of Excellence to target specialty care.

* https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/ForecastSummary.pdf

** A preferred provider organization (PPO) combines the advantages of a national network with the option to use physicians and facilities outside the network, but at a higher cost.

are using telehealth

Plan Design

are considering

are considering

are using concierge or advocacy care models

Seven out of 10 employers measure the overall level of health of their workforce over time

Employee Health

Telehealth

Advocacy

Roughly 79%use employee claims data to track their health

93% say PPO and Centers of Excellence/specialty care are somewhat or very important when considering a carrier

Network Options

71% 19%

36% 47%

The health care landscape is rapidly changing along with the needs of employees. To adapt, employers are implementing several plan design changes and evaluating many different factors.

Health care is being reinvented through both demographic changes

and industry shifts. These trends promise to take us to Health 2.0, a fundamentally different model for

health care. In conjunction with that evolution, we wanted to dig

deeper into employers’ plan

design strategies and how they

are adapting to the changing

landscape. We looked at how behavioral health, controlled

substances, pharmacy benefits, industry consolidation and point-

solutions might have an impact on health care delivery. Additionally,

we examined family planning and caregiver support. In exploring

these areas, we gained key insights into how employers are

navigating the road ahead.

What We HeardAccording to the Centers for Disease Control and Prevention (CDC)*, on average, 115 people in the U.S. die each day from an opioid overdose. The national growing concern for the opioid epidemic extends to employers, and half see identification of members who are at risk as the key tactic for tackling it. Many employers require prior authorization or put limits on opioid prescription strength and quantities.

When it comes to behavioral health and wellbeing, several employers are offering self-directed online resources to support employees. Additionally, telemedicine continues its growth here, specifically in support of behavioral health, with nearly one-third of employers considering it over the next 3-5 years.

Additionally, regarding the rising cost of prescription drugs, the eyes of many employers are on pharmacy benefit managers (PBMs). Specifically, with data sharing among PBMs and medical carriers, employers are split on whether they think it is effective.

* cdc.gov/mmwr/volumes/67/wr/mm6709e1.htm

What’s NextAs industry players are forced to revisit their playbooks, employers must have innovation and intelligence as the foundation for competitive advantage in the future. Their responses tell us that looking forward, network point solutions will be driven by cost savings. And, advocacy

point solutions will be driven by member service and support.

Between 2019-2020, we will implement five new Blue Distinction® Centers that address the opioid epidemic and high drug costs, specifically centered on: Fertility Care, CAR-T, Gene

Therapy, Cancer Care and Substance

Use Treatment.

Nearly two in five are very or extremely concerned with controlled substances or opioid use within their organizations

Three in five are engaged in determining high-price drug coverage limitations and/or exclusions

have financial incentives linked to program engagementIncentives

66% incentivize biometric programs and/or health risk assessments 54%

Three in fiveFamily-friendly

Benefits

Interest in caregiver support programs are expected to

employers offer family planning benefits, including fertility, adoption or surrogacy support

2019 2022

double over next 3 years

Over half of respondents felt that their PBM was somewhat transparent or not transparent at all

Pharmacy 2019 2024

double over the

next 3-5 years

Interest in benefit structures that optimize site of care may

As employers look forward in determining what is next for their employees, they explore creative solutions to improve access.

Employers continue to seek innovative ways to provide their employees with the best health

benefits while saving on costs and improving outcomes. They

are looking at a variety of factors. In their evaluation, many are

comparing narrow and tiered

networks, exploring different ways to access care and monitoring

provider quality, among other areas. The assessment is

continuous, but when it’s time to communicate, some are falling

short with how they’re providing employees with information about

these benefits. We placed a spotlight on each of these points.

What We HeardNational surveys have revealed that employers are adopting a more focused strategy to address high-cost claims in 2019. Our surveys on “Population Health” and “What’s Working, What’s Next” dug deeper into where employers are shifting their focus to control the costs of these claims, and the results showed that they are using several tactics. Specifically, they are turning to pharmacy

management programs, high-touch care coordination services and providing employees access to specialized networks, Centers of Excellence, and hospital collaborations.

Regarding provider quality, many employers are looking to consultant, carrier, or provider data when making network decisions.

What’s Next Over the next three years, employers will consider PPOs, Centers of Excellence and specialty networks most important when considering a carrier, followed closely by high-performance

and quality networks*.

The growth of telehealth will continue as it has over recent years, but it’s important that employers inform their employees and educate them on the benefits of using it to increase adoption.

Specific to access, we’ll continue to see network add-ons like on-site and near-site clinics. And, many employers will consider adding Employee Assistance Programs (EAPs), on-site fitness centers and specialty care as services in their on-and near-site clinics by 2021.

* High performance/Quality Network: Includes higher performing physicians and hospitals that drive increased value. Can be offered as stand-alone with EPO-type benefits or as tiered benefits alongside broader PPO networks. Utilization and quality performance are measured and monitored regularly with high provider engagement. May include payment models with significant shared risk offered.

Just over 40% believe communication positively impacts employee satisfaction and decision-making

Quality

Digital-Enabled Care

Convenient Care

More than one-third of respondents are considering implementing behavioral health and musculoskeletal care management/physical therapy through digital platforms by 2021

85% are using consultant, carrier or provider data to evaluate network quality

About half are considering narrowing and/or tiering networks within three years

Telehealth On-site clinics

92% of employers with on-site clinics find them effective at increasing convenience and access

Nine out of 10 employers believe that high-performance networks are an important network option

High-Performance Networks

Communication

Employer Pulse is a quarterly survey that uncovers emerging health benefits trends. The panel of respondents includes group customers of Blue Cross and Blue Shield Plans in Illinois, Montana, New Mexico, Oklahoma and Texas. Each of these employer groups has at least 5,000 employees, and collectively they make benefits decisions for more than 3 million employees. The surveys were conducted between January and December 2018 and were shared with an average of 146 employers. There was an average

of 59 respondents per survey*.

*Total number includes partial responses.

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Blue Cross and Blue Shield of Illinois, Blue Cross and Blue Shield of Montana, Blue Cross and Blue Shield of New Mexico, Blue Cross and Blue Shield of Oklahoma, and Blue Cross and Blue Shield of Texas,Divisions of Health Care Service Corporation, a Mutual Legal Reserve Company, an Independent Licensee of the Blue Cross and Blue Shield Association