The cost of specialty medical treatments is escalating at an unsustainable rate—typically a double digit percent increase year-over-year. Even worse, large employers with self-funded plans are footing the bill for newer high-cost treatments, some in the millions per treatment. Employers have many concerns related to high-cost treatments: the million-dollar price tags and the speed at which the treatments come to market, which can call into question the rigor and timeline of clinical trials.
What’s more, an increasing focus of the research and development pipeline is on treatments for narrow subsets of patient populations with rare diseases—making this an exciting time in health care when patients with certain illnesses, sometimes terminal, are able to receive treatments or even be cured, the report notes.
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| Large Employers’ Top Health Care Initiatives, 2020 |
However, as a result of the pipeline of treatments for rare diseases, large employers are increasingly focused on the impact of even one or two cases on their overall annual health care budgets. For example, Zolgensma, a one-time injection to treat spinal muscular atrophy in young pediatric patients, was launched in May at a $2.1M price tag, sending employers into action mode to uncover ways to finance such therapies.
In 2019, about one-quarter of employers are delaying the inclusion of new treatments from their formulary at launch (e.g., for 6 months) to enable the pharmacy benefit manager (PBM) or health plan to better determine the treatment’s efficacy and safety. The other two options—stop-loss insurance and outcomes-based contracting—aren’t as popular an approach, but are being considered heavily for 2021/2022.
In 2018, a majority (56%) of large employers voiced skepticism about the proposed health plan–PBM mergers. Specifically, they were unsure if these newly formed relationships would lower cost, improve quality and curate a better consumer experience. As a followup to that survey question, this year’s survey dove into whether employers are “voting with their feet” by going out to bid in direct result of mergers between health plans and PBMs.
The survey finds 16% of surveyed employers are issuing a request-for-proposal (RFP) due to health plan–PBM mergers. Another 30% are considering doing so in 2021-2022. These numbers are an indication that consolidation is having a profound effect on the health care industry, which could result in a plan change—health plan or PBM—for a number of employers, the report says.
The full report is only available to NBGH members, but an executive summary of the findings is available here.
