COVID-19 has shifted employer focus to health and wellbeing

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January 5, 2021

COVID-19 has shifted employer focus to health and wellbeing

Without a doubt, COVID-19 has upended life in the United States, altering our daily habits and social interactions. It also has changed the way we work, creating many new problems, processes and opportunities, while accelerating some transformations already starting to take place before coronavirus. Employers have confronted unprecedented challenges, both economically and operationally, struggling to maintain a bottom line while still protecting the wellbeing of their employees.

As a result of the financial burdens of COVID-19, health care costs, already spiking before the virus overwhelmed the country, are expected to escalate further. Some experts predict the added cost to be in the billions of dollars. Understanding how companies have experienced and reacted to the coronavirus crisis was the aim of a recent survey sponsored by the nonprofit Business Group on Health.

The 2021 Large Employers' Health Care Strategy and Plan Design Survey was conducted between May and June of 2020 to solicit information about organizational approaches to health care and benefits amid the pandemic. It included 122 employers covering more than nine million people and representing a wide range of industries, such as health care, hospitality, retail, financial services, manufacturing and technology. The data was supplemented with interviews.

The survey focused on how businesses plan to deal with the impact of COVID-19 through their benefits plans and overall workforce strategies. In particular, questions addressed virtual care offerings and the role of onsite services now and in the future, as well as health care cost trends, benefit design changes and mental health.

Key insights

One of the most important findings was that, more than ever before, employers see health and wellness as essential elements of their workforce strategies, with 45% of respondents citing this priority, up from 36% in 2019 and 27% in 2018.

Other notable findings included:

  • 53% of respondents see a need to implement more virtual care solutions and believe telehealth is here to stay.
  • 36% plan to expand mental health services after noticing a greater need for such support.
  • 72% either currently have an onsite health clinic or plan to have one by 2023.
  • 51% have an advanced primary care strategy for 2021, with a focus on population health management, chronic disease management and whole-person care.

Among large employers, the survey found that a common concern was the unpredictability of health care costs, as many employers recognized the impact of delays in care resulting from the COVID pandemic. With so many employees deferring care this year, costs that declined in 2020 will likely multiply in 2021. High-cost specialty drugs was another issue, with 80% of employers concerned that strategies to finance expensive therapies do little to control overall prices.

A common priority was to improve outcomes, quality, costs and the overall health care experience, especially relating to delivery system reforms. This included greater interest in advanced primary care arrangements, although the implementation of such arrangements was, in many cases, delayed by the pandemic that simultaneously spotlighted flaws in the status quo. Still, employers plan to move forward in 2021 with an increased number of onsite clinics, which were able to deliver necessary enhanced services and meet the extra demands of the COVID crisis.

Strategic implications of COVID-19

For many organizations, the pandemic accelerated a growing trend. More large employers are beginning to view their health care strategy as an integral part of their overall workforce strategy, with 38% believing COVID-19 has had a significant or very significant impact on it.

When the coronavirus struck, many businesses took immediate steps to improve virtual care solutions and support for employee mental health. According to survey data, large employers’ virtual care has skyrocketed, with more than three-quarters making changes to allow for better access to virtual care and 71% accelerating telehealth virtual offerings.

As large employers deployed virtual and digital care solutions to improve the delivery system, there was a 67% increase in telehealth utilization in the first half of 2020, compared to the entirety of 2019. These efforts during the pandemic have had a positive effect — specifically, an increase in virtual care utilization and better access to telehealth visits for primary care services and specialty care, as well as an uptick in remote chronic condition management.

Other organizational health care changes as a result of COVID-19 included: 43% adding new mental health benefits or offerings to support employees working from home, 24% modifying network restrictions or designs and 12% delaying delivery system reform efforts.

Despite the pandemic, on-site services will grow and play a critical role in 2021. On-site clinics and mental health counselors proved to be flexible and viable enough to adapt to the current landscape and provide COVID-19 testing and virtual counseling. For most employers, on-site services will continue to be part of their approach to health care.

Focus areas for employers

The 2021 Large Employers’ Health Care Strategy and Plan Design Survey provided a window into the ways that employers are addressing COVID-19 through their benefit plans, programs and overall workforce strategy outlook.

Among the main themes that surfaced were the role of health and wellbeing in workforce strategy; the ubiquity and range of virtual care solutions; the challenge of projecting pandemic-impacted volatile health care costs; the continued attention on, and increased acceptance of, mental health issues; the ways COVID-19 has both overshadowed and underscored delivery reform efforts; the concern about high-cost specialty drugs; and the growth and flexibility of onsite clinics.

Based on the survey findings, seven focus areas for large employers in 2021 were identified:

  1. Implement more virtual care solutions (52%)
  2. Expand access to mental health services (36%)
  3. More focused strategy on high cost claims (31%)
  4. Expand COEs to include additional conditions (24%)
  5. Implement high performance networks (12%)
  6. Move away from full replacement high deductible health plan (9%)
  7. Implement advanced primary care solutions in select markets (8%)

Given the financial and operational struggles as a result of the coronavirus, companies must consider how to become more efficient and cost-effective, to protect their employees, streamline processes and improve productivity. For organizations, executing the health care strategies outlined in the large employer survey into their overall workforce strategy can generate major benefits. Paladina Health can help you address these seven focus areas and integrate direct primary care solutions into your health care offering.

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