- Health care trends for 2020 - Health Care Economics 101 (what drives cost) - What top performing companies are doing

1. The Health Care Challenges
Employers Will Face In 2020
part of the STOP THE INSANITY webinar series

2. AGENDA
1. What to expect in 2020
2. Health Care Economics
3. The next webinar

3. What to expect in 2020

4. Drug spending will grow faster.
• Between 2020 and 2027, retail drug spending is projected to increase at a rate
of 3 percent to 6 percent a year.
• The impact of generics will plateau
• Biosimilars will continue to see slow uptake
• 300 new costly therapies will enter the market by 2021
• 2/3 are specialty drugs
• Many cost over $100k; one costs over $2M
Trend #1

5. Trend #1

6. Trend #1

7. Chronic diseases will continue to
plague the United States.
• 60% of adults have a chronic disease.
• 40% are managing two or more.
• Since 2005, prevalence of obesity and diabetes increased by 26%.
• Per capita health spending on an individual with a complex chronic
illness is 8X that of a healthy individual.
Trend #2

8. Trend #2

9. Employee affordability will continue to be a concern.
• 40% of consumers who have high deductible plans said they would rather not
have one.
• 28% of consumers who have high deductible plans have $500 or less in
emergency savings.
• The average deductible tripled between 2008 and 2018.
• High deductibles have led to low utilization trends because employees are delaying or
forgoing care due to their deductible.
Trend #3

10. Trend #3

11. Employers and payers will nudge
people toward lower-cost sites of care.
• Payers are designing plans to encourage members to choose free-
standing facilities and in-home care, rather than more expensive sites.
• How those benefits are designed and how employees perceive the
costs will shape the effectiveness of site of care strategies.
Trend #4

12. More employers will help employees
maximize their benefit packages.
• More employers will improve communication to help employees
navigate the system and make the most of their benefits.
• The goal is an experience that is more seamless with the rest of the
traditional health plan networks.
Trend #5

13. Trend #5
AboveAveragePlan BelowAveragePlan
Effectively
Communicated
Ineffectively
Communicated
83%
Favorable
76%
Favorable
26%
Favorable
22%
Favorable
Percentage of employees that feel favorably
about their employer’s health care plan

14. Overall Health care trend will increase slightly
Trend #6

15. Health care trend will be driven by price
(not utilization)
Trend #7

16. • Utilization decreased by .02% from 2013 to 2017
• Prices rose 17% during that same time
• Driven by Provider megamergers and physician consolidation
• CMS projects price growth will continue through 2027 driven by:
• Higher health care sector wages
• Improving economy where consumers are less sensitive to prices
Trend #7
Health care trend will be driven by price
(not utilization)

19. Health Care Economics 101

20. THE HIGH-PERFORMER GAP
Top performers get annual increases that are 10%-15% less than the average
company.

21. Cumulative 10-year health care cost per $1,000,000 in spend today:
$10,462,000
$15,937,000
$20,303,000
THE HIGH-PERFORMER GAPTHE HIGH-PERFORMER GAP

22. Cost
[ P x U ]
Who is managing your health care delivery
supply chain?

23. Cost
[ P x U ]
1
2Execute
and measure
your progress
3
THE HEALTH CARE FLYWHEEL
Create your
GamePlan
and choose
your tools
Build your
Strategy
How can we begin managing our health care delivery
supply chain?

24. AVOIDING THE TRAPS IN
THE HEALTH CARE SYSTEM
THE NEXT WEBINAR:
FEBRUARY 25 – HNI.COM/UNIVERSITY