Mercer Exec: Employers Are Extremely Concerned About Cost

Mercer Exec: Employers Are Extremely Concerned About Cost


Employers have a long list of concerns when it comes to healthcare, and at the top of that list is cost, one expert said.

“Employers are extremely concerned about cost. They are focused on most of their top cost drivers,” said Agnes Quiggle, principal health transformation collaborative leader at Mercer, a consulting firm. Quiggle made these comments Tuesday during an interview at HLTH 2023 in Las Vegas. 

The top cost driver for employers is cancer, she noted. Cancer overtook musculoskeletal conditions in this category last year, according to Business Group on Health. Quiggle said that cancer diagnoses are “increasing rapidly” and people are living longer with the disease.

Pharmacy spending is also a key driver of healthcare costs, Quiggle stated.

“Our clients are very focused on, what does their formulary look like? What are they approving? What are they not approving?” she said.

Part of that concern over pharmacy spend is GLP-1s, which support the treatment of type 2 diabetes and obesity, she added. The drugs are considered a breakthrough for these conditions but come with a hefty price tag.

“[The GLP-1 conversation] has just exploded over the past year,” Quiggle said. “The cost is so significant that employers want to make sure that they’re doing the right thing for the member and helping them where they can but also making sure that it’s actually evidence-based and clinically appropriate for those people to be on those medications.”

What can employers do to manage costs? One way Mercer is working with employers is by talking to them about high-performance networks and making sure that “quality and cost are balanced.”

“There are a ton of providers out there who have really poor quality scores and they cost much more than the standard rate,” Quiggle said. “So let’s at least try to eliminate those providers. We don’t need to narrow the network hugely, but let’s do a quality review and exclude those people because you want to pay at least for average or better quality.”

When it comes to cancer costs, Mercer is encouraging employers to work with cancer support vendors, who can help with cancer screenings and provide assistance when patients receive a diagnosis. This could include referring patients to the right providers and 24/7 chatting with coaches. Quiggle did not name any of these vendors who provide cancer support, but one example is Thyme Care.

To manage prescription drug costs, Quiggle said it starts with determining who the right partner is.

“Is it someone through a collective? Is it one of the big three PBMs? Or are you an employer that’s interested in going to a transparent PBM, which there are many more of?” she said. “This is just going to be your cost of the drug plus a margin that is very clear, and you know what it’s going to be, kind of like the [Mark Cuban Cost Plus Drug Company] model.” 

In addition, Quiggle also recommended that employers look at the virtual care offered in their health plans.

“To manage costs, you want to make sure that those virtual care plans are not duplicating other visits because you don’t want to double pay for a virtual visit and then they need to go in person,” she said.

Photo: Ta Nu, Getty Images



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