Post-Crisis: What’s on Employers’ Minds as we Settle into a New Normal

We see a new normal on the horizon. We believe COVID-19 will eventually become endemic and gradually become something we learn to live with, like the seasonal flu. It’s far from an ideal situation, but one that will be easier to navigate as time goes on. The concept of a “post-COVID-19” world is a misnomer; instead, we can hope for and expect a “post-crisis” reality.

As we move into this next phase, there are several trends we know are top of mind for employers as they navigate the rest of this year and beyond. These trends include:

• An increased demand for behavioral health services.
• A gradual return to traditional healthcare utilization.
• Reaching an equilibrium in the use of digital tools.
• Care delivery in a “work from anywhere” environment.
• Better employer engagement with the nation’s healthcare infrastructure.

An Increased Demand for Behavioral Health Services

Throwing Away the Playbook

Over two years of a tragic and frightening pandemic have taken their toll on many Americans’ mental health, it is clear this is putting us head-on with an imminent behavioral health crisis. According to a study published in The Lancet, the pandemic has resulted in 53.2 million additional cases of major depressive disorder and 76.2 million cases of anxiety disorders around the world (and our societal mental health burden and systems of care entered the pandemic in troubled states).

Conditions and needs are expected to take many different forms, only some of which may be identifiable in the next year. For example, posttraumatic stress disorder (PTSD) can manifest years after the crisis period has ended. At the same time, we know that many conditions go undiagnosed. According to the National Alliance on Mental Illness, one in five U.S. adults and one in six children are experiencing a behavioral health issue; however, about half of this population never receives treatment. Research shows that even a 1 percent improvement in the treatment rates for behavioral health disorders in the U.S. could yield as much as $2.4 billion in annual medical savings.

Employers have been actively working to add behavioral health services to benefits packages for years to address this pervasive problem; however, a national shortage of qualified providers has slowed access. While the pandemic amplified the problem by creating additional stressors and social isolation among employees, it also accelerated the development of virtual care solutions that can expand access and enable employees to work with specialists from anywhere in the country. It should come as no surprise that a survey from the Business Group on Health found that up to 96 percent of large, self-insured employers intend to offer insurance coverage for virtual behavioral health services by 2023.

The question remains: Is it enough? Not only do employers need to concern themselves with employees who are in active crisis today, but also those associates who are approaching a tipping point. And getting as upstream as possible in behavioral health conditions - before they become profoundly disruptive - is a very worthy endeavor for employers and beyond. According to a recent McKinsey & Company survey of more than 5,000 full-time employees, about half report signs and symptoms of burnout - a stepping-stone to other behavioral health issues like depression.

The acute need for behavioral health services means that employers will need to be looking for proactive and forward-thinking partners who can provide solutions for access to a broad range of behavioral health needs-—from access to virtual counseling to intensive omni-channel substance use disorder treatment and support. When it comes to provider partners for employers, those systems that can build and scale their ability to provide virtual behavioral health services are most attractive and best positioned to help differentiate employers’ benefits packages. Additionally, employers will increasingly look to provider partners who have demonstrated expertise in identifying and forming behavioral health networks and partnerships within primary care medical homes for the purpose of population health management.

In the years to come, we anticipate employers will compete to attract talent using several tools at their disposal, one of which will be the comprehensiveness of their behavioral health services offerings. To improve the quality of these offerings, we fully expect more innovative partnerships specifically targeted at addressing these needs. We can only hope that we also begin to see a simultaneous rise in the utilization of these services to ensure we stave off a subsequent epidemic in mental health conditions.

A Gradual Return to Traditional Healthcare Utilization

Back in Business – Sorta…

Speaking of care utilization, its our opinion that the back half of 2022 will bring a continued wave of elective procedures and more care utilization as people continue to re-engage with healthcare systems and to address ignored or delayed medical needs. So long as the healthcare workforce can keep up, of course (more on that later).

Research shows there's a lot of catching up to do.

For example, childhood immunizations were down roughly 60 percent in April 2020 compared to 2019. For human papillomavirus (HPV) vaccinations, Memorial Sloan Kettering Cancer Center estimated that more than one million vaccine doses were missed. At the same time, we also know many adults delayed mammograms, colonoscopies, prostate-specific antigen (PSA) screenings and other routine diagnostics. While we won’t know the full scope of the long-term implications, the National Cancer Institute expects to see 10,000 preventable deaths over the next decade due to pandemic-related delays in diagnosing and treating of breast and colorectal cancer alone.

Delays in ambulatory and elective procedures have resulted in similar dips. Looking at orthopedic procedures, one market research analysis found that roughly 83.5 percent of all procedures performed in the U.S. were delayed, postponed or canceled in 2020. When cases of the COVID-19 variant Omicron started to spike across the country, we saw these procedures canceled yet again, which may lead to worsened conditions when employees finally do access the system.

This means predicting future health plan costs is far more challenging than it once was for employers. At the height of the pandemic, employer medical costs were driven to artificial lows because of decreased utilization. But now, we are seeing a rebound in costs as utilization started to tick up over time. The closest comparator we have for this kind of activity is after the introduction of the Affordable Care Act, where first time access to health insurance spurred increased utilization for delayed care and treatment. In 2019 the average monthly premium per enrollee in the individual market was $515, up from $217 in 2011 – equating to an annual growth rate of 11.6 percent. At the same time, access to and use of healthcare services also increased.

With utilization and expenses expected to increase, employers must be wondering how to manage costs. Historically, the answer has been to pass increases to individual employees and their families. The average annual premiums in 2021 for a family was $22,221, a 4 percent increase from 2020. Premiums for a family have on average increased 22 percent since 2016. But this year is a bit different given the ongoing competition for talent. In this environment, we except employers will be looking to differentiate themselves and their benefits packages, and total costs shouldered by employees will be a major decision-making factor in this process. Employers with health plans that incent members to access the best, most appropriate care for their needs in an easy-to-access environment will likely have the edge over those who only use member cost-share as a driver. Centers of excellence programs are a powerful means (among several) by which patients can be offered better options to them make the right care choices and help to avoid unnecessary treatments and procedures.

Many employers are asking how to best support employees who are increasingly likely to be dealing with a serious condition at a more advanced stage in disease progression due to delays in care. Previous estimates of costs associated with delayed treatment totaled almost $40 billion in 2012. No doubt, the cost in 2022 and beyond will be higher.

All of this taken together points to increased utilization of care in the relatively near term and in the years to come, particularly as we likely transition from pandemic COVID-19 to endemic COVID-19. For the employers we work with, our recommendation has been to build a closer partnership with providers and to build a relationship of mutual understanding and priorities. With the vast amount of data at both providers’ and employers’ fingertips, it is important to understand patient and provider behaviors and work on joint strategies to improve.

Reaching Equilibrium in the Use of Digital Tools

Decision Overload

In 2021, the average budget for employer-sponsored well-being programs reached an average of $6 million, up from $4.9 million as reported in 2020. But the return on that investment is much murkier.

Going into the pandemic, employers were besieged by digital health companies begging for inclusion in the benefits package, all marketed under the header of improved health outcomes and lower cost. According to one study, more than 90,000 digital health apps were introduced in 2020 – more than 250 per day. Increasingly, the report notes, these apps are geared towards condition management as opposed to more holistic wellness, with the former now accounting for 47 percent of all apps.

These one-off digital solutions that are not integrated into a broader ecosystem often do not move the needle from a cost or quality standpoint.

Contigo Health, LLC has been hearing from employers of all stripes that the fragmentation in this marketplace leads to wellness offerings being cobbled together, resulting in an abundance of technologies that usually don’t work together holistically. Furthermore, the value promised has remained elusive, making it challenging to prove that these various apps have been effective at lowering costs and improving outcomes. According to the Centers for Disease Control and Prevention (CDC), “understanding the full public health impact and value of digital health will take time and rigorous studies.” This is an understatement.

This is not to say that employers have given up on technology – simply that investments may take a different form. Increasingly, the tech-forward solutions delivering the greatest value to employers won’t always be the ones geared towards employees. Instead, we see deep and sustained value in employers investing in innovative technologies for their provider networks. For example, clinical decision support solutions that integrate within the electronic health record and prompt physicians to provide evidence-based care have demonstrated an ability to improve outcomes and ensure appropriate treatment is given to patients.

This could also take the shape of embracing the “right” digital solutions into the care program. For example, we have seen success in offering both virtual and in-person evaluation and treatment plans for members dealing with a cancer diagnosis.

When the pandemic struck and travel became riskier for the immunocompromised, some of our ECEN oncology provider partners pivoted to offer virtual connection so patients could access certain services without the need for travel. Adding this virtual modality turned into a win for patients, employers and providers alike. As a result of this success, Contigo Health has recently integrated a virtual expert medical opinion offering into its Oncology Center of Excellence program.

The call to action for those out there working on apps and programs they plan to sell to employers is to create solutions which are unique and powerful that are NOT perceived as contributing to the fragmentation problem employers and associates face.

Care Delivery in a “Work from Anywhere” Environment

Anywhere and Everywhere?

In the “old” days, employers were local, with the vast majority of employees working out of a single corporate headquarters or campus. At one point, there were more than 2,500 company towns, housing 3 percent of the U.S. population. Even as employers grew in size and the location of their employees became less concentrated, benefits packages generally tended to focus services on the immediate area around the corporate headquarters, where the majority of employees lived.

Today, many employers have their workforce scattered across the country. Companies have been growing in size to have nationwide footprints. A quick look at the 2021 Fortune 50 shows a vast majority of these companies with key outposts across the country, regardless of where headquarters may be located. A closer look reveals the top four are major retailers with either storefronts or distribution networks in all fifty states. A look at a 1991 Fortune 500 list shows no retail giants and instead a collection of companies that, in many cases, were often closely associated with the cities and towns in which they were based (think automotive and energy).

While there was always a workforce shift, the pandemic put things into overdrive. An analysis from The Wall Street Journal found that many Americans left the large metropolitan areas during the pandemic, migrating towards less populated and more affordable communities offering more room to breathe. Dovetailing with this is the trend away from the large flagship headquarters to remote, hybrid or semi-permanent arrangements where employees may be located virtually anywhere.

For employers, providing benefits packages that can accommodate a diasporic workforce presents several challenges. Our experience tells us that gone are the days of using local leverage with local providers to create narrow networks.

With this in mind, we expect self-insured employers to increasingly look at building flexible, purpose-built networks for their employees. Companies will work with third-party administrator (TPA) or business process outsourcing (BPO) firms to stitch together a broader network that uses its scale to ensure more competitive pricing, particularly in regions where there might not be a critical mass of employees.

We regularly hear from employers that they are beginning to think through how to best manage for more of these arrangements in their plans and where they will be able to get the best and most cost-efficient care for their associates and families.

In the years to come, we will see benefits offerings change with regard to scale and availably – as well as offerings like care-at-home that might not have been previously thought about – along with more guardrails and guidance around virtual visits. We will also see purpose-built networks whereby employers can determine what they want included in their benefits offerings (while organizations like Contigo Health fulfill it on their behalf). This will help ensure high quality and appropriate care is delivered to employees in a convenient and cost-effective manner, resulting in greater levels of satisfaction.

Better Employer Engagement with the Nation’s Healthcare Infrastructure

Getting a Grip

Its become evident that employers are becoming much savvier consumers when it comes to understanding the providers in their regional markets. They want to understand the intricacies behind the supply chain capabilities, capacity for care and areas of expertise.

What we’ve learned over the years is that employers want health products and services that help them attract and retain healthy employees. They hope to achieve this through a predictable and manageable cost structure. Contigo Health has long believed that health systems and employers need to get closer to one another. The pandemic and subsequent supply chain and labor issues have accelerated this in a different way.

In 2022 and beyond, we expect employers to proactively focus on providers and provider quality at national, regional and local levels. For example, they will want to ensure that the providers in their community are managing through the increased costs they are facing – both from supply and labor standpoints – so that they have peace of mind that they can continue to deliver care for their employees. Top of mind among many are the 500,0000 nurse retirements expected in 2022, which could further reduce the nursing workforce, coupled with a stagnant talent pipeline. How this gulf is bridged will be of the utmost importance. Furthermore, employers want to ensure that these hospitals and health systems continue to deliver high-quality, cost-effective care.

Our experience tells us that employers will increasingly look to partner with entities that can offer business process optimization for payers and providers, in addition to centers of excellence programming that can guarantee access and appropriate care.

We believe programs like centers of excellence will continue to expand to meet members where they are. This will coincide with increased efforts to identify high-quality providers right where employee associates live and work. We anticipate that referral patterns will adapt in short order to account for a more geographically disparate employee base.

Businesses must continue to look for ways to differentiate themselves in this hyper-competitive labor market. Providing high quality medical centers for highly specialized care is one of the levers they may continue to push for a leg up - think centers of excellence for complex and specialized care coupled with powerful methods to help people get care virtually and close to home for chronic and less complex conditions. This will continue to be the case, especially as employers move closer to network design and to creating their own networks to ensure access to the best clinical outcomes.

Conclusion

While we entered 2021 on the precipice of a mass vaccination effort we had expected would get us closer to normal, we find ourselves in 2022 hopeful that we will watch COVID-19 become an endemic virus that no longer creates the disruption we have become used to. COVID-19 has made it more challenging to plan ahead, but we are hopeful that the back half of the year will bring a semblance of normalcy for all of us. We anticipate that will help take a degree of pressure off of employers across the country.

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