7 Healthcare Trends Employers Should Pay Attention to in 2024
Though we rang in 2024 just a few weeks ago, it’s likely you’re already sick of all the messaging around goals, resolutions, and “new year, new you.” We get it—that rhetoric is almost impossible to escape.
While we highly suggest not getting too caught up in all the ways you should change yourself (we’re willing to bet you’re just fine the way you are), we do think taking time to look at the year ahead can help set you and your team up for success.
Employers—most notably self-insured ones, who shoulder a large portion of healthcare costs—should be aware of the most pressing healthcare trends, as it can help them stay on top of the care their employees need and better anticipate and manage their healthcare spend.
The start of the new year is as good a time as any to catch up with the latest and greatest healthcare trends.
7 healthcare trends to watch in 2024
Here are seven healthcare trends we think employers should keep an eye on in 2024.
1. Healthcare costs will, unfortunately, continue to increase
You’re probably sick of hearing this as well, but we can’t ignore it.
According to estimates from benefits consultants at Mercer, Aon, and Willis Towers Watson, employer healthcare spend will increase between 5.4% to 8.5% in 2024. A variety of factors are to blame, including but not limited to inflation, a higher incidence of serious chronic conditions, and rising prescription drug prices (more on chronic conditions and drug prices below).
2. Mental health issues will remain a primary concern
Society’s collective dialogue about mental health concerns like anxiety, substance use disorders, and depression has transformed greatly in recent years. In 2021, for example, 23% of employees said they felt comfortable discussing their mental health at work. This number doubled in 2023, with 46% saying they felt comfortable.
This is great news (and we hope this percentage keeps growing), especially because mental health issues certainly aren’t going away. On the contrary, they’re increasing.
According to Mental Health America, almost 55% of adults who have a mental illness haven’t received mental health treatment—and of those struggling with a substance use disorder, almost 94% go without care.
There are many limitations people face in getting treatment, such as cost, lack of insurance coverage, a severe shortage of mental health practitioners, and—despite ample progress—the stigma that still remains around talking about and seeking help for mental illness.
These three issues have been dominating healthcare spend in recent years, and they will continue to do so in 2024.
Cancer: According to a study from the American Association for Cancer Research, costs related to cancer care are projected to rise by more than 30% by 2030, as compared to 2015. Our data shows us that a single employee’s cancer treatment can cost between $120,000 and $400,000, which is incredibly expensive and demonstrates the huge cost fluctuations and unpredictable spend patients and payers experience.
Musculoskeletal procedures: In March of 2023, Hinge Health reported that half of all Americans have a musculoskeletal (MSK) condition. Thanks to an aging population, reduced physical activity, and poor ergonomic setups, that number is only expected to increase. Over the last 10 years, healthcare spend attributable to MSK issues has reached $20 billion—almost doubling—and, concerningly, many of these procedures are deemed inappropriate or don’t even work.
Cardiovascular conditions: Per the Centers for Disease Control and Prevention, cardiovascular conditions like heart disease and stroke cost the U.S. healthcare system $216 billion annually. Rising risk factors (e.g., obesity and hypertension) and overtreatment mean overall spending on cardiovascular diseases is expected to more than double by 2035.
4. Employees will continue to need support for chronic disease management
More than four in 10 employers believe there will be a larger need for helping their employees navigate chronic conditions such as diabetes, obesity, arthritis, and asthma. As a result, these employers will continue exploring strategies and partners that will help them provide better support and preventive care for their team members while also controlling the high costs that come along with these conditions.
Between 2020 and 2021, for example, the per-person cost for hypertension increased by 24.9%, and there were similar jumps seen in diabetes (24.8%), stomach and intestinal disorders (29.9%), and other chronic conditions.
5. Pharmaceutical costs are on the rise
As we noted at the beginning of this post, one of the main reasons employer healthcare spend will increase in 2024 is due to skyrocketing pharmaceutical costs. In fact, experts predict “spending for retail prescription drugs will be the fastest growth health category and will consistently outpace that of other health spending.”
We can’t address pharmacy costs without mentioning GLP-1 drugs, which hit the headlines over and over again in 2023. The high cost of these drugs—about $1,000 per patient each month—combined with the exponential increase in the number of patients seeking them out has many employers concerned about how they will manage these costs going forward.
If your organization has been feeling the pain of the increase in prescription drug costs, you’re not alone. Business Group on Health reports that 91% of employers are concerned or very concerned about overall trends in pharmaceutical costs. There’s also widespread concern about the prescription frequency and the lack of transparency around drug pricing.
6. Preventive care is more important than ever
One of the most concerning healthcare trends we saw during the height of the pandemic was an unprecedented number of people deferring preventive care. And, unfortunately, many people are still deferring care, though for different reasons. Over 50% of those surveyed put off necessary care due to cost and insurance barriers and 42% cited appointment availability as a deterrent.
As you likely already know, ensuring employees receive preventive care is absolutely crucial when it comes to things like catching cancer (and treating) cancer as early as possible, managing chronic conditions, and screening for mental health conditions.
As we see the effects of deferred care result in problems such as delayed cancer diagnoses and musculoskeletal conditions that have gotten so bad they require surgical intervention, employers must figure out how to connect all their people—no matter where they live or what their income is—to preventive care.
7. Employers are shifting toward value-based care
As healthcare spend skyrockets and health outcomes worsen, more and more employers want to start tying costs to outcomes (rather than services rendered). A 2023 report found that 69% of employers said they preferred value-based care—and only 20% believe the fee-for-service model has more pros than cons.
Experts from McKinsey & Company believe the use of value-based care models will increase across all lines of business, including commercial. They project that, in 2027, 70 to 80 million people will receive value-based care through their employer by 2027, as compared to 40 to 45 million people in 2022.
Employers certainly don’t have an easy year ahead of them when it comes to ensuring their employers are well taken care of while also protecting the organization’s bottom line. However, being on top of these healthcare trends will result in a much better outcome than being caught unaware.