The year’s top trends that will carry over into 2024

The following article was originally posted on the Mercer US Health News blog. You can find this article along with more health news content here.

By Beth Umland, Director of Research, Health, Mercer and Tracy Watts, Senior Partner, National Leader for US Healthcare Policy

We’re not quite finished with 2023 yet! Before we break for a winter holiday, we want to take a moment to look back at some of the events and emerging trends of 2023 that will carry over into next year. Recognizing that not even our most devoted followers have gotten to every post this year, we’ll point you to a few that totally blew up when they went live – at least by US Health News standards.   

We’ll start with health benefit cost, because that’s going to be a common topic around the C-suite next year. After more than a decade in which cost growth averaged about 3% annually, in 2023 the average per-employee cost of employer-sponsored health benefits rose by 5.2% to reach $15,797. Cost increases were highest for small organizations (those with 50-499 employees), averaging 7.8%. Inflation was one factor driving cost growth in 2023, as healthcare providers negotiated higher reimbursement rates with health plans to offset higher wages and supply costs.  

But another big factor was pharmacy benefit cost, which jumped 8.4%. That’s due partly to a rapid increase in utilization of GLP-1 drugs for the treatment of diabetes and obesity. It’s more than a TikTok-driven weight-loss fad; GLP-1s may play an important role in addressing the obesity epidemic in the US. If they haven’t already, employers will need to spend time in 2024 figuring out how to manage what may be a source of considerable Rx cost. This Q&A with Mercer pharmacists might help.   

Of course, long before Ozempic became a household name, pharmacy benefit cost has been rising faster than other components of health plan trend. Drug prices and PBM pricing practices have been the focus of much legislative activity, at both the state and federal level, and that will continue next year. We’re also likely to see more high-cost specialty drugs reaching the market, such the new breakthrough therapy for sickle cell disease.  

With another health benefit cost increase north of 5% projected for 2024, employers are putting cost management front and center. However, healthcare affordability remains a concern, and employers are pivoting to strategies that don’t shift cost to employees, like providing more intensive care management and steering patients to higher-quality care. (You can hear about some creative approaches employers are taking to improve affordability in our podcast, Beyond the salary: addressing healthcare affordability for employees). In addition, employers continued to selectively enhance benefit offerings in 2023, particularly in the areas of mental health care and women’s reproductive health. 

Sadly, 2023 may be remembered as the year that extreme climate events became a reality to a whole lot more people. Wildfires in California and Canada brought dangerous levels of air pollution to huge swaths of the country, southern states experienced many consecutive days of temperatures above 100 degrees, and a fire in Maui caused unimaginable loss.  An important take-away for employers is to have plans and policies in place to support employees affected by extreme climate events and mitigate the physical and mental health impacts.  

What else? 2023 was also the year that many of us finally returned to our worksites, and a hybrid approach of in-person and remote work has become a permanent fixture in many organizations. According to our latest employee survey, employees who come to a worksite tend to be more engaged, energized, and committed. Sounds like human interaction is good for us – but you probably didn’t need us to tell you that.