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Millennial Health Trends Impacting Your Employer Healthcare Costs

Millennials make up a significant portion of today’s workforce. Understanding millennial personalities, lifestyles, and well-being is key for many employers to successfully continue the operations of their organizations, especially in the wake of the COVID-19 pandemic.

A recent report published by the Blue Cross Blue Shield Association highlights several concerning health trends among millennials that employers will want to be acutely aware of. The issues associated with these trends could be exacerbated by the COVID-19 pandemic, which adds to the importance of understanding and preparing for the bumpy road of millennial health that lies ahead.

In this post, we’ll provide an overview of two of these key trends:

  1. Rates of behavior health conditions among millennials are increasing.
  2. Millennials with behavioral health conditions are more likely to have a chronic physical condition.

We’ll also briefly talk about what actions employers can take to address these trends in their workforce.

Rates of Behavior Health Conditions Among Millennials Are Increasing

Unfortunately, behavioral health conditions have been rising among millennials. The list below highlights some of the most pertinent conditions and their corresponding increases over the past five years:

  • ADHD – 39% increase
  • Tobacco Use Disorder – 10 % increase
  • Major Depression – 43% increase
  • Substance Use Disorder – 17% increase
  • Alcohol Use Disorder – 5% increase
  • Psychotic Disorders – 26% increase

This data was gathered before the COVID-19 pandemic. As you can imagine, rates of many of these behavioral health conditions are likely to increase even more due to this pandemic. In the report, 92% of millennials said that COVID-19 has had a negative impact on their mental health overall.

Also noted within the research are more statistics that show the frightening effects the pandemic has already had on millennials, “Because of the pandemic, almost 60% of millennials have canceled a health-related appointment or procedure. In addition, isolation, stress and economic insecurity attributed to the pandemic have had a major impact on millennials. Almost 10% have lost their job due to the pandemic, 25% have seen a reduction in their work hours, and 23% have had to access savings to pay for their day to day needs.”

Millennials With Behavioral Health Conditions Are More Likely to Have a Chronic Physical Condition

An extension of the issue described in the previous section is that millennials with behavioral health conditions are more likely to have a chronic physical condition. Specifically, millennials with behavioral health conditions are:

  • 1.9 times more likely to experience hypertension
  • 1.7 times more likely to develop high cholesterol
  • 1.9 times more likely to have Crohn’s Disease/Ulcerative Colitis
  • 2.1 times more likely to have Type II Diabetes
  • 2.7 times more likely to have Coronary Artery Disease

Given that nearly one-third of millennials have behavioral health conditions (and rising), employers should anticipate an increased need to address the above physical conditions in the future.

Millennials seem to be aware of these trends as well. When surveyed, 54% of millennials perceive their mental health as good or excellent, compared to 64% of baby boomers. Further, 80% of millennials believe their mental health has an impact on their physical health, compared to 62% of baby boomers. This shows that many millennials are aware of the mental health issues facing their generation as well as the potential physical health issues that follow.

What Can Employers Do?

Many employers will feel discouraged after reading this post. Millennials will face behavioral and physical health challenges in the future, and employers like you want to do your best to help them.

One of the best strategies that is recommended by Launchways is to work with a trusted and experienced benefits broker. Consider the following ways a benefits broker can help you address the trends discussed in this article:

  • Guide you as you negotiate with your health service providers to make sure adequate mental and behavioral health services are available for your employees.
  • Perform an audit of the demographics of your workforce to determine more specifically how it will be affected by these millennial health trends.
  • Implement strategies to incentivize employees to not skip their routine preventative medical services.

Key Takeaways

The topic of this article is very concerning, especially for employers with workforces that are Millennial-dominant.

Key takeaways from this article include:

  • Rates of behavioral health conditions have been rising over the last five years.
  • Individuals with behavioral health conditions are much more likely to experience chronic physical conditions.
  • The COVID-19 pandemic has already had negative effects on the health of Millennials, and unfortunately there will almost certainly be more negative effects moving forward.  

Employers should consider working with a trusted benefits broker, like Launchways, to implement strategies to care for the mental and physical health of their Millennial employees.

How Will the COVID-19 Pandemic Impact Your Employee Benefits Program?

Many HR professionals are awaiting key information from insurers on healthcare costs for 2021. Given all the uncertainty surrounding the COVID-19 pandemic and how it will impact healthcare costs for 2021 and beyond, employers may be faced with difficult decisions very soon.

To help employers navigate these uncertain waters, we’ve put together some key considerations that you may useful in light of COVID-19’s impact on the U.S. healthcare system.

In this post, we’ll cover:

  • Avoiding the traps associated with short term gains
  • Understanding key industry trends to keep in mind
  • How to effectively communicate plan decisions to your team

Short-Term Gains are Deceiving

Even with the costs of treating COVID-19, many employers have seen savings in their health plans during 2020. These short-term gains are most likely because many employees have been putting off preventative or elective care due to lockdowns, financial uncertainty, or simply a desire to stay home during the spread of the virus.

Although these decisions have decreased health care costs as a whole during 2020, this trend is unlikely to continue into 2021. Employees will soon return to preventative care regimens, and likely with a much higher demand that usual, and a winter season during the pandemic could lead to an increase in costs to treat COVID-19.  These two factors combined could lead to a substantial increase in healthcare costs, and employers should plan accordingly.

Industry Trends to Keep in Mind

A recent survey performed by Mercer reveals some interesting HR industry trends to be aware of:

  • Nearly 32% of companies are considering, “Adding, expanding or incentivizing virtual care, telemedicine, and/or remote/online digital care.” On a related note, 66% of companies anticipate virtual health and wellbeing offerings becoming permanent fixtures in the workplace.
  • Nearly 20% of companies are likely to change health care plans, or at least change the design of the health care plan, to share more costs with employees.
  • Over 55% of companies are currently conducting, or are planning to conduct, on-site temperature screenings, and 40% are considering on-site symptom questionnaires. Both of these trends are presumably to help employers catch potential infections early on and reduce workplace spread.
  • 16% of companies are planning to add or expand voluntary benefits. Doing so can help fill the gaps with things like hospital indemnity and critical illness coverage.
  • 92% of employers have taken, or are planning to take, steps to provide more, “flexible work options to align to a new way of working.”
  • 20% of employers are considering implementing, “New messaging to help employees consider how the pandemic might affect their usual benefit choices.”

If you are unsure about the potential need to make changes to your 2021 health benefit program due to the pandemic, you are not alone. Nearly 50% of companies surveyed indicated that they are not sure about what changes they’ll make in 2021 and they are currently monitoring the situation.

Of course, many of the trends listed above have associated implementation costs. On the other hand, these benefits are designed to improve employee health, which should drive down costs in the future. Research has shown that employers are extremely concerned with the mental health of employees during the pandemic. By reading the list above, and by reading more closely into the Mercer survey, it’s clear there are significant changes in the industry that are designed to help employees maintain their mental health.

The exact extent to which these industry trends will drive down costs is yet to be determined, but companies should be aware of these trends and consider implementing them if it makes the most sense for their business model and employee population.

Communicating Your Plan Changes with Employees

Regardless of what benefits decisions your company makes for 2021 and beyond, the need to communicate openly and frequently with your employees about their benefits options has never been more important. Employees deserve to be kept in the loop about the challenges that your company is likely facing. Doing so will help company leadership maintain the trust of employees, with is critically important during these difficult times.

Your company should have a designated employee, or team of designated employees, to plan the employee communications that go along with any benefits decisions. They should constantly be asking themselves, “If we change or eliminate X benefit, how will we appropriately communicate that to our employees?” Now, more than ever before, it is critical for employees to understand their benefits. Therefore, it is more important now than ever to master the art of communicating benefits changes to your employees openly and frequently.

Even better yet, working with a proactive benefits broker that takes on the employee communication piece of your plan rollout can be even more impactful. The right benefits broker will be able to help your employees see the true value in the benefits being offered, and can help employees select the plan that’s right for them and their family.

Key Takeaways

Nearly half of companies are unsure about what difficult benefits decisions they will have to make over the next few months. Hopefully, this article has provided useful information to you as an employer or HR professional to help you be better situated to make these tough decisions.

Here are some key takeaways from this post:

  • Business leaders should not get deceived over the fact that their health care costs have been low during 2020. They will most likely increase substantially in 2021.
  • Current industry trends indicate that companies are taking precautions to limit COVID-19 outbreaks at their workplaces. Companies are also taking extra steps to care for the mental health of their employees. Voluntary benefits options are also being expanded to fill in potential gaps that may be created by upcoming plan decisions.
  • Employers should openly and frequently communicate with their employees about the challenging benefits decisions that may be taking place soon. Good communication is critical for maintaining positive relationships with employees, which matters now more than ever before.

Actionable Strategies to Combat the Healthcare Cost Problem Created by COVID

The ongoing COVID-19 pandemic has created a new dynamic within the US healthcare system, leading to increased healthcare costs being passed onto employers. During this economically challenging time, it’s more important than ever before that employers are strategically managing and addressing rising healthcare costs.

There are three variable factors directly impacting healthcare costs: unit price of healthcare services, the number of services required, and the number of patients requiring service. In order to impact this equation, there are three strategies employers can deploy.

  1. Change the unit cost of healthcare.
    Even prior to COVID, ineffective and uninformed healthcare decisions were already a leading cause of rising healthcare costs. Now, in a post-COVID world, the impact of poor healthcare decisions is having an even more significant impact on employers. This issue typically arises when employees lack the guidance, resources, and other information they need to make smart healthcare choices. This results in employees incurring higher costs of care and leveraging lower quality providers. These costs are then passed onto their employer. In order to combat this, employers must work with a hands-on broker that provides their employees with guidance during the benefits selection process. Additionally, the correct broker should provide employees support in selecting the best healthcare providers for their unique situation and life stage. By making more informed decisions, patients receive better healthcare outcomes and less costs are passed onto the employer.
  2. Impact the number of services used.
    As the demand for routine and preventive healthcare services skyrockets in a post-COVID world, the ability for patients to receive the care they need, how and where they need it, has become increasingly important. Employees are more commonly demanding personalized guidance in managing their health. As an employer, implementing solutions that cater to employees’ unique situations or communication preferences can ensure they receive correct, accurate information that is relevant to them. Providing personalized content in easy-to-access channels helps employees proactively find care and identify other programs offered to them, such as telemedicine. As an employer, consider solutions that remove barriers to care as an important component of your overall cost-control strategy.
  3. Manage the demand for care.
    The last recommended strategy is to proactively manage the number of people on your employer-sponsored healthcare plans. Each year, employers unknowingly spend millions on dependents that do not meet eligibility requirements for the benefits the company offers. By leveraging effective processes and strategies to eliminate ineligible users from their plans, companies can reduce healthcare costs. A key recommendation is to conduct a regular ineligibility audit to ensure your employee population and plans are managed in a consistent and fair manner to ensure equal treatment of employees to manage employer costs.

Are you interested in implementing these strategies at your business? Launchways can help, get in touch with us today.

Four Reasons Employers Should be Concerned About COVID Impacting Healthcare Costs

This post continues our ongoing series of articles on how COVID will impact employer healthcare costs. In today’s blog, we’ll discuss four ways that COVID will likely lead to increased costs for employers.

  1. As healthcare providers begin to reopen and quarantines are lifted, routine treatments will be significantly more expensive in a post-COVID world. During the COVID pandemic, hundreds of thousands of routine visits and procedures were delayed. As healthcare providers reopen, there will be a large surge in demand for simple procedures and medical imaging. Under normal circumstances, dedicated imaging centers and surgery centers would be the most cost-effective locations for individuals to receive the care they need. However, the large surge in demand will push many people into hospital settings to receive the testing and treatment they need. Unfortunately, in hospital settings, healthcare costs can double, triple, or even potential quadruple depending on the nature of the procedures.
  2. During COVID, access to prescriptions has impacted the healthcare outcomes of those with chronic conditions. Under normal circumstances, individuals on long-term maintenance medications typically have access to 30-day supplies. During the COVID outbreak, many individuals with pre-existing conditions felt uncomfortable leaving their homes to refill prescriptions, leading to lower adherence rates to prescription regimens. In fact, recent research indicates that as much as one third of Americans avoided receiving necessary care due to fear of contracting COVID. When individuals with chronic conditions aren’t connected to care, this can mean substantial costs being passed onto employers. Non-adhering diabetics can cost an extra $5,000 per year. And individuals who forego mental health medications can cost an extra $10,000-$15,000.
  3. Delays in treatments for those with chronic pain may lead to substantial treatment costs for opioid addictions. Every day, thousands of individuals undergo musculoskeletal treatments for elective procedures to reduce or eliminate chronic pain. However, due to COVID, all of those procedures were delayed. In non-COVID times, these individuals would be able to seek other forms of care, such as physical therapy, to help manage that pain while waiting for corrective surgery. However, during COVID individuals were also unable to access these treatment options. Many frustrated patients turned to their doctors for pain medication to help manage pain during surgery delays. These unfortunate circumstances may very well likely lead to future costs due to opioid dependency. Generally speaking, the ongoing opioid crisis costs the U.S. roughly $78.5 billion each year. And research estimates that opioid addiction costs $14,000 in direct claims costs per patient per year.
  4. Delayed preventative care creates future risks for more serious conditions and costly treatment plans. In many cases, preventative screenings and treatments are crucial for limiting the amount of critical care individuals need. During non-COVID times, cancer screenings were rising in frequency and are generally recommended by providers. In the case of most treatable cancers, such as breast cancer or colon cancer, early detection is the best strategy to limit complications and ensure positive patient outcomes. Unfortunately, during COVID-19, preventative care and screenings were halted for several months. These delays are likely to lead to substantially more serious diagnoses that are harder to treat and more expensive to provide care for.

How COVID-19 has Altered the 2020 Healthcare Landscape

Prior to the COVID-19 crisis unfolding, most US employers were anticipating healthcare cost increases in the range of 4-7%, based on trends in 2018 and 2019. However, COVID-19 has drastically altered the healthcare space and thus dismantled most employers’ previous predictions. While some are now anticipating decreased healthcare costs for 2020, this does not mean good news for employers. In fact, the monumental impact COVID-19 has had on the healthcare space could mean employers will be facing unprecedented cost increases in 2021 and 2022. These impacts are something employers must be preparing for now, rather than later.

In this post, we’ll explore the major ways COVID-19 has impacted the healthcare landscape. We’ll delve into what this means for businesses in the near-term (the duration of 2020), as well as crucial action steps employers must be taking now to prepare their businesses for 2021 and beyond.

How has COVID impacted healthcare costs?

Due to the COVID crisis, by late March 2020, many American businesses had temporarily ceased operations and closed their physical offices. The immediate impact of the virus was a significant surge in the demand for hospital space in markets with significant virus spread, such as New York. However, the most significant shift across the country was a stark decline in elective care.

For the most part, over the past few months no procedures or surgeries deemed as “nonessential” have been conducted, in order to preserve hospital space and supplies for those with COVID. The shutdown of nonessential medical services and procedures lead to the furloughs of tens of thousands of healthcare workers.

As a result of all these challenges, in the second financial quarter, Americans are receiving substantially less care than anyone could have ever predicted. This impact will result in an unprecedented $140B to $375B decrease in care costs (and this figure includes the costs of COVID-19 treatments).

However, this short-term cost decrease will do little to offset substantial future increases. Models predict that in 2021 and 2022, the trend of rising healthcare costs will reset at a higher lever with a higher slope indefinitely. Employers must be planning and preparing for these changes now by working hand-in-hand with their benefits broker to enact effective cost-control strategies.

What’s the bottom-line?

As an employer, it’s important to realize that COVID-19 has substantially altered the extent to which employees have been able to receive the care they need. Although this shift will result in short-term healthcare cost decreases, the long-term impact is grim. Employees will be driven to more expensive care settings as healthcare becomes available again, resulting in substantial costs increases in 2021 and 2022. Employers must begin preparing for these costs now, by working proactively with their broker on impactful cost-control methods.