Cancer has moved to the front of the line among the drivers of large employers’ healthcare costs, according to a new survey from the Business Group on Health.
In the 2023 Large Employers’ Health Care Strategy and Plan Design Survey, cancer overtook musculoskeletal conditions as the top cost creator, followed by cardiovascular disease; the three were also the biggest cost generators last year. Importantly, 13% of employers said they have seen workers being diagnosed with more late-stage cancers and another 44% anticipate seeing such an increase in the future, likely due to pandemic-related delays in care—signaling that the cost trend will get worse. A total of 135 large employers across varied sectors, who together cover more than 18 million people in the United States, completed the survey from May-July.
Patricia Goldsmith, CEO of CancerCare—a national organization providing free support to cancer patients and their caregivers—says that employers undoubtedly face challenges when trying to balance the realities of health insurance and prescription drug costs. But, as they consider cost-saving measures, they should also think about the costs of limiting access to the right treatments at the right time.
“The increase in diagnosis of late-stage cancers clearly demonstrates what happens when medical care—in this case, screenings—are delayed,” she says.
Costs have a direct impact on treatment non-adherence, Goldsmith says. When patients’ out-of-pocket expenses are unaffordable—and are currently costing the U.S. economy as much as $300 billion per year on top of that—they are less likely to seek the care they need, leading to worsening conditions. She says employers should consider these costs, as well as the benefits themselves, at the top of discussions about organizational budgets.
“Coverage should encourage cancer screenings, and post-diagnosis biomarker testing where appropriate to pinpoint the most effective cancer treatment,” she says. Goldsmith adds that employers should offer plan and formulary designs that encourage treatment adherence by keeping out-of-pocket costs low and eliminating unnecessary administrative burdens that delay treatment.
Finally, Goldsmith says, employers need to “make sure that formularies are based on clinical factors rather than rebates, which create perverse incentives to cover high-cost drugs,” she says. “The best way to hold down long-term costs is through early diagnosis, quick access to the right treatment and policies that encourage treatment adherence.”
Some other key findings of the survey include:
- After 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 (employer support for family coverage remains at 80% of premium).
- Long-term mental health issues, both observed and anticipated, are the leading health-related impact of the pandemic, employers report, with increases in medical services due to delayed care a close second.
Ellen Kelsay, president and CEO of Business Group on Health, says the survey findings function as a “collective snapshot” that can guide employers as they determine how to maximize employee benefits.
“Employers shared that they are deeply concerned about unsustainable healthcare 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 healthcare experience, among other issues,” Kelsay says.