6 healthcare trends that will shape 2024

6 healthcare trends that will shape 2024, according to Business Group on Health

December 6, 2023 3:18 PM

Two doctors analyzing X-rays under bright white light.

More often than not, healthcare costs plague employers' budgets — but 2024 is putting companies to the test, as inflation pushes prices further and the upcoming U.S. election brings more uncertainty to the healthcare landscape.

According to Mercer, healthcare benefit costs will jump by 5.4% in 2024, outdoing a decade-long average of annual increases that fell between 3% and 4%. Fueled by factors like the record inflation rates of 2022, provider shortages and deferred care due to the pandemic, health plans are finally feeling the full force of the last three years, explains Ellen Kelsay, president and CEO of Business Group on Health.

"The healthcare costs and affordability trend is certainly not new this year," says Kelsay. "But what is especially concerning as we look to the year ahead is the rate of increase being higher than it has been historically."

But rising healthcare costs isn't the only concern employers should have on their radars. Business Group on Health rounded up different trends that will shape the healthcare landscape in 2024, from the fight for prescription drug transparency to potential policy changes around ERISA. The next year won't be easy, but Kelsay believes informed employers still have the power to influence what healthcare looks like in this country.

Here are six healthcare trends to watch in 2024, according to Business Group on Health.

Healthcare costs have nowhere to go but up

Inflation isn't the only thing driving up costs — the overall increase of serious chronic conditions in the U.S. and new medical treatments like gene therapies are coming with big price tags that inflate the rest of the healthcare system. Kelsay notes that the high demand for GLP-1s for managing diabetes and obesity will spike employers' costs too, if it hasn't already. Whether the employer is self-funded, or their plan is fully through an insurance carrier, they will feel the impact, says Kelsay.

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Mental health services are still a priority

According to Business Group on Health, 70% of employers plan to prioritize mental healthcare access in 2024, underlining that mental health services are still in high demand. Notably, a Gallup survey found that depression rates among American adults are at an all-time high, increasing from 19.6% in 2015 to 29% in 2023. This not only means more people are struggling mentally, but are seeing doctors and getting diagnoses for it.

Kelsay predicts that employers will continue to invest in digital solutions, but they will ask for more specialized treatment from their chosen vendors. She highlights emerging areas of concern, namely youth and adolescent mental health, substance use disorder treatment and suicide prevention.

Preventative care is a must

If employers want a shot at mitigating rising healthcare costs, they have to prioritize preventative care. According to the Business Group on Health, cancer is still the number one driver of healthcare costs, and nearly half of employers expect to see a higher rate of late-stage cancers in their workforce due to delayed screenings.

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"Screenings, seeing a primary care physician and immunizations are all things that each of us should be doing on a regular basis to maintain good health," says Kelsay. "Employers need to have a 'back-to-basics' focus on fundamental primary care."

Drug price transparency is still part of the conversation

While federal regulations like the Inflation Reduction Act have chipped away at this issue, employers and policymakers are demanding more transparency from PBMs and drug manufacturers.

"There's a lot of opacity and some inherent conflicts of interest along that supply chain causing an unwillingness for some of those parties to provide transparent, clear information into their business practices," says Kelsay. "For many employers, it's just a very challenging scenario."

Kelsay notes that more employers may seek a rebate-free model, meaning working with newer, alternative PBMs that do not get payments from drug manufacturers for adding certain medications to their plans.

The U.S. presidential election will shake things up

Depending on who the country chooses as its president and representatives in the next election, there may be further policy shifts around drug pricing, transgender care and ERISA. Kelsay notes that as rhetoric around state rights grows louder, there has been more attention placed on ERISA's preemption provision, which prohibits states and localities from enforcing statutes or ordinances on employee benefit plans.

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"We've seen the preemption status challenged at greater levels of frequency at various state levels," says Kelsay. "Depending on the next election, we may see some changes."

Employers want more from their healthcare partners

As healthcare benefits become more costly, employers are looking to their brokers, consultants, insurers, PBMs and digital healthcare vendors for solutions. While Kelsay doesn't think employers are going to start ending partnerships all at once, she predicts employers will narrow down their services, cutting redundant, underutilized benefits. In other words, partners have to prove they can deliver quality care and savings.

"Employers are asking those partners to have proof points from the data outcomes that validate their programs are indeed delivering on their promise," says Kelsay. "Right now employers are taking a step back, and asking if they need all these solutions.