Employers skeptical of virtual health, GLP-1s: survey

Employers are increasingly skeptical of virtual health and concerned about medication costs, according to a survey published Tuesday by the Business Group on Health.

The industry group representing employers surveyed 152 members, with 19 million total insured workers, on their healthcare-related insights and possible investments for the coming year.

Read more: Providers, insurers and pharma play blame game on Wegovy shortage

Here are five takeaways from the survey. 

1. Concerns about virtual health are mounting.

Two years ago, 85% of employers surveyed by the Business Group on Health said virtual health was going to have a significant impact on how care is delivered, compared with 74% of employers last year. This year, the share shrank to 64%. 

Employers are increasingly troubled about some of the downsides of virtual health, the survey revealed. Around 70% of respondents expressed trepidation about how virtual care solutions can create a siloed experience for their employees accessing services, and nearly half said they're concerned about how these solutions may not directly connect with each other. Many digital health companies that target the employer market say buyers are not interested in “point solutions,” an industry term for software products that only focus on one area of medical care. 

About half of employers said they’re concerned about the quality of care offered by virtual health providers, and 43% said the digital health solution market is saturated. 

2. Employers are split on GLP-1s for weight loss.

The rising popularity of weight-loss medications has raised questions for employers on whether to cover the pricey drugs. Glucagon-like peptide agonists, or GLP-1s, such as Novo Nordisk’s Wegovy and Ozempic can cost more than $10,000 per year per individual, according to an analysis from digital health and drug pricing company GoodRx. The cost is one reason insurers and other payers are limiting access to the medications, even as demand soars.

Nearly all respondents to the Business Group on Health's survey cover GLP-1s for diabetes. But only 46% cover the drugs for weight loss. An additional 3% are adding GLP-1s as a benefit for weight loss in 2024, and 13% said they are considering coverage for 2025.

The cost of coverage also emerged as a top pharmacy benefit concern: 85% of employers said they are worried about the long-term financial implications of GLP-1s and other weight management medications.

3. Cancer, musculoskeletal disease drive costs.

When asked to name the top three conditions driving cost, 86% of employers said cancer and 75% said musculoskeletal diseases. Cardiovascular conditions were next-highest on the list, selected by 30% of the companies surveyed, followed by diabetes (27%) and maternity-related needs (23%).

Employers are looking for new ways to diagnose and treat cancer. About three-quarters of employers said they will invest next year in companies that increase access to cancer screenings, and 30% are currently covering genomic testing for cancer treatment.

4. Mental health remains a top priority.

As with last year's survey, mental health stayed high on employers' priority list. The survey found that 77% of employers are seeing increased mental health issues as a lingering effect of the COVID-19 pandemic. Improving access to mental health will be the top focus area in 2024 for 77% of respondents.

But connecting employees with services may be easier said than done. While nearly every employer used apps, articles, videos and webinars to try to increase access to care, 47% worked with insurance plans to expand mental health networks. About one-third of employers said they covered out-of-network treatment for mental health and substance use disorder services.

5. Healthcare costs are on the rise.

The survey found that healthcare costs are soaring. Respondents estimated that average per-capita costs (employer and employee combined) would be $17,201 in 2023, with employers shouldering an average $11,762. The combined cost was up from $15,862 in 2022, and $15,412 in 2021.

Employers pointed to the cost of drugs as a major concern. The survey found medications accounted for almost one-fourth of employer healthcare spending in 2022.