Rising Costs Drive Health Plan Innovations

Against the backdrop of sharply rising health care benefit costs—fueled largely by increased spending on specialty drugs and the meteoric rise in GLP-1 use—Ani Huang led a team of health care experts in a discussion on how employers can rein in expenses without compromising the quality of their health benefits.

Why it matters: CHROs and their total rewards teams can no longer rely on traditional health care “gatekeepers” to deliver the best plan options. Instead, the webinar’s experts highlighted strategies that companies can adopt to maintain high-quality care while driving down costs.

Change as an imperative: With up to 40% of health plan spending considered waste, according to panelist Andy Gregg of Prudential, companies must go beyond conventional consulting. Collaborating with peers and zeroing in on financial efficiencies is essential. “Change is the best thing you can do—the status quo is a tinder box,” advised Lee Lewis of Health Transformation Alliance, emphasizing that savings don’t have to come at the expense of care quality.

Small changes, big impact: Both Johnni Beckel of OhioHealth and Andy Gregg advise taking a close look at your health care data, where hidden costs may lay, and the nitty gritty of your contract agreements.

1. Formulary inefficiencies: Duplicative drugs can drive up costs unnecessarily, especially since providers often aren’t aware of drug pricing. Prudential’s team has taken a proactive approach, reaching out directly to prescribing providers.

2. Primary care matters: Employees with a designated primary care physician (PCP) tend to manage their health more effectively.

   • OhioHealth implemented a consumer navigator app that helps employees find high-quality providers tailored to their needs. By incentivizing its use, the company realized an estimated $6.3 million in savings.

3. Plan design optimization: According to Lee Lewis, companies can make meaningful improvements by year-end:

   • Add “site of service” options to self-funded plans, similar to those used in fully insured models.

   • Drop true out-of-network coverage while preserving exceptions for critical need.

   • Cap high-cost categories such as dialysis and J code therapies.

   • Emphasize carrier management by using a template contract with your RFPs to preserve negotiation strength, capping currently uncapped fee categories, and ensuring strong carve-outs and data rights are in place.

What about GLPs? With GLP-1s prescribed for weight loss driving massive cost increases, employers must tread carefully. 

“If all 40% of eligible Americans were prescribed GLP-1s, employers would go bankrupt,” warned Mr. Gregg, who brought in a new vendor to oversee all GLP-1 prescriptions.

OhioHealth, facing annual GLP-1-related costs of $12–15 million a year for just 1,700 employees, eliminated coverage for weight loss use. As part of the change, the company enhanced weight management support and clearly communicated the change to employees—explaining both the rationale and the cost implications of maintaining the benefit.

The bottom line: As Lee Lewis advised, “You have to be willing to be the skunk at the garden party and ask questions. As you manage and focus on your plans, you can’t help but find common sense improvements.”