Healthcare Affordability Crowds out Wages, Price Transparency
Drives Employer Concerns and Fuels Action Per National Alliance Survey

Pulse of the Purchaser study also finds employee recruitment/retention has never been bigger priority

WASHINGTON - NOVEMBER 2, 2022 Unsustainable healthcare costs thwart employer efforts to attract and retain talent as 73% said it crowds out salary and wage increases, and 82% report it impacts ability to remain competitive. These are among the findings of the latest survey of more than 150 employers conducted by the National Alliance of Healthcare Purchaser Coalitions (National Alliance) and its members.

The Pulse of the Purchaser study gauged concerns and strategies of employers to address the workforce environment, hospital price and quality transparency, health and wellbeing benefits including reproductive, health equity, and greatest threats to affordability of employer-sponsored coverage for employees and their families.

“The consensus among many of the responding employers is that attracting and retaining employees has become a street fight,” said Michael Thompson, National Alliance president and CEO. “Concerns about a recession and runaway inflation make it even more critical that employers are able to hire and keep top talent and getting unreasonable healthcare costs under control has a far-reaching impact on wages and ability to compete.”

Additional employer concerns and strategies include:

• Three biggest threats to affordability - Drug prices (93%), high-cost claims (87%) and hospital costs (79%) are most significant cost drivers of employer-sponsored health benefits coverage for employees and their families.

• Transparency increasing awareness - Employers familiar with transparency tools such as those from RAND, National Academy for State Health Policy, and Sage Transparency are 6-10 times more likely to strongly disagree that hospital prices are reasonable and defensible and 93% said that hospital consolidation has not improved cost or quality of services.
  
  
• Purchasing strategies to reduce costs - In light of hospital pricing practices almost half (47%) of employers are using centers of excellence and within the next 1-3 years many employers are considering tiered networks (46%), site of care (43%), contracting and performance guarantees tied to Medicare pricing, and reference-based pricing (36%).
  
  
• Leading health strategies - Approaches that 9 out of 10 employers are currently doing or considering are high-cost claims (94%), mental health and substance use access and quality (94%), hospital quality transparency (93%) and price transparency (91%), and whole person health that covers both physical and emotional wellbeing (90%).
  
  
• Attraction/retention has never been a bigger priority - Most employers (78%) strongly agree it’s an even higher priority post-pandemic, and 100% strongly agreed or agreed that health and wellbeing benefits are critical to achieving.
  
  
• Hybrid workforce complexity challenges - While 2 out of 3 employers permit some form of remote work, the complexity that comes with accommodating a hybrid workforce creates challenges according to 93% of the respondents. Interestingly employees are grappling with this as 31% disagree with the need to adapt or modify health and wellbeing strategies to accommodate.
  
  
• Fiduciary responsibility - Over 95% of employers agree that they have a right and responsibility act as a plan sponsor fiduciary.
  
  
• Health equity on the move - Over half of employers are currently engaging various departments companywide to discuss company strategies and 41% are reviewing and addressing the role of workplace policies, with another 24% planning to do so.
  
  
• Supporting reproductive benefits - For birth control, 93% of employers said they provide coverage, 82% provide coverage of abortion services, and 50% offer coverage of fertility services under the medical benefit. Few are considering eliminating any reproductive benefits in light of the Roe decision. For travel benefits 4 in 10 are offering or considering offering, but the great majority are not limiting that benefit to abortion services.
  
  

The online poll of 152 employers that are members of coalitions affiliated with the National Alliance was conducted in August and September 2022. Organizations represented included manufacturing, educational services, public administration, finance and insurance, and healthcare and social assistance institutions. Purchasers ranged in size from very large (31%, 10,000+), to large (36%, 1,000-9,999) to mid-size (33%, less than 1,000). The full Pulse of the Purchaser results can be found here.

2022 Annual Forum
This research will be among the topics of discussion at the National Alliance 2022 Annual Forum, November 7-9 in Arlington, VA. The event brings together employers, coalitions and other healthcare thought leaders to share industry insights to tackle today’s most pressing workplace opportunities and challenges. Learn more and register.

About National Alliance of Healthcare Purchaser Coalitions
The National Alliance of Healthcare Purchaser Coalitions (National Alliance) is the only nonprofit, purchaser-aligned organization with a national and regional structure dedicated to driving health and healthcare value across the country. Its members represent private and public sector, nonprofit, and Taft-Hartley organizations, and more than 45 million Americans, spending over $300 billion annually on healthcare. To learn more, visit nationalalliancehealth.org and connect with us on Twitter and LinkedIn.

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