Survey Gives Insight Into Employers' 2025 Health Care Strategy

The 2025 Large Employer Survey from Business Group on Health is now available. Find an executive summary here. 

Below are Vanderbilt Health Employer Solutions' key takeaways from the eight sections of the report as well as calls to action for employers.

Part 1: Perspectives on Health Care Key Takeaways

• Addressing health care costs is employers’ No. 1 priority for 2025. When asked to rank eight priorities for 2025, 81% put health care costs overall in their top three, with more than half (53%) placing it as their top concern. Affordability for the organization, employee experience and affordability for employees will also be prioritized by many employers in 2025. 
• Employers are experiencing several issues impacting their employee populations. A large majority are seeing an increase in services to treat mental health and substance use disorders, as well as a rise in interest in obesity treatments. 72% report a higher prevalence of cancers within their workforce. 
• If faced with the challenge of reducing cost to prior year levels, employers would redouble efforts to manage vendor performance via RFPs (30%) and eliminating those who underperform (22%). Further, employers would assess difficult decisions related to effective but costly treatments such as GLP-1s and other medications (22%). 
• Employers are firmly committed to providing robust health and well-being benefits to their employees, but they also want to make sure that these benefits are competitive with those offered by their industry peers and enhance the employee value proposition. 
• Call to action for employers: Employers will need to remain vigilant about all aspects of cost containment, including vendor management, pharmacy cost drivers, and chronic and costly medical conditions. Absent a strategic and proactive focus, future plan viability may be threatened. 

Part 2: Health Care Costs Key Takeaways

• Health care trend is projected to rise 7.8% in 2025; plan design changes will bring the increase down to 6.6%. This is the highest projection seen by this survey in 15+ years. At that rate of increase, health care costs in 2025 will be more than 50% of 2017 levels. 
• Pharmacy costs are rapidly consuming a greater portion of employers’ health care budgets, climbing from a median of 21% to 27% of health care dollars spent on pharmacy alone in just 2 years. Some employers are turning to alternatives such as moving to fully transparent PBM arrangements. 
• Many employers are grappling with coverage of expensive therapies like GLP-1s, with some considering various initiatives such as prior authorization and stronger eligibility requirements for coverage. 
• Cancer continues to lead as the top condition driving health care costs, but more employers have included cardiovascular disease among their top three conditions driving costs. 
• Call to action for employers: Health care costs will continue to be a challenge for employers over the next few years. Employers should have serious discussions with their leadership on the implications for the organization and gauge their company’s comfort with different cost-cutting strategies and associated degrees of disruption. 

Part 3: Vendors and Partnerships Key Takeaways

• Based on the survey data, employers appear to be sending a clear message that they are looking for greater value and a stronger commitment from all of their partners. 
• Employers are reassessing their partnerships, with 22% saying that they are looking to change health and well-being vendors in 2025 and an additional 38% are putting out RFPs or assessing current offerings. PBM relationships are particularly under scrutiny, with a third of employers planning an assessment and/or RFP process in 2025. 
• 7 out of 10 employers believe that control of whether a vendor partner serves as a fiduciary should remain with the employer as plan sponsor; half of those would welcome vendor partners presumed to be fiduciaries with employer discretion to opt out of having the vendor serve as fiduciary.
• Call to action for employers: Employers looking to reduce health care costs should start with streamlining their vendor ecosystem, seeking efficiencies through integration of programs and vendors. Next, employers should reconsider their relationships with vendors that provide duplicative services and those who are unable to produce meaningful outcome data on the impact of their offerings on employee health. 

Part 4: Health Care and Mental Health Design Key Takeaways

• Employers continue to be focused on providing plan choice to employees, with 85% offering a high-deductible health plan (HDHP) as an option alongside other plan types. Among those who do offer an HDHP as an option, about half (54%) report that the HDHP is the highest enrolled plan. 
• The most commonly offered programs are those that support the mental health, metabolic and musculoskeletal needs of employees. Digestive health offerings are anticipated to double over the next 3 years. Employers continue to focus on mental health access, with their attention aimed at ways to eliminate access and cost barriers. 
• Potentially, more than half of employers will offer an engagement platform in the next 3 years. This upward trend illustrates employees’ need for better navigation within an increasingly complex environment. 
• Call to action for employers: Employers will face a number of challenges in 2025, including a higher prevalence of cancers. Given that cancer is the #1 driver of health care costs, employers should: 1) launch communication campaigns; 2) ensure preventive care coverage can support early detection; 3) leverage current health plans’ utilization protocols; 4) promote cost effective care; 5) monitor patient experience; and 6) track future advancements. 

Part 5: Pharmacy Costs and Management Key Takeaways

• In 2023, employers spent a median of 27% of health care dollars on pharmacy, up from 21% in 2021. 
• Employers’ top pharmacy benefit concerns include appropriate use and/or long-term cost implications of GLP-1s and other newer weight management medications, patient and plan affordability of high-cost drugs as well as pharmacy costs in aggregate. 
•  cost overall ranks second among employers’ top health and well-being priorities for 2025. Unexpectedly high utilization and anticipated demand for GLP-1s, along with a pipeline of high-cost cell and gene therapies, are exacerbating these cost concerns. 
• Call to action for employers: Pharmacy costs are climbing faster than other health care costs, so employers should make them one of their top priorities when addressing costs, including seeking greater degrees of accountability and transparency from their pharmacy partners. Employers should have a clear strategy on how to cover GLP-1s and work with their partners on anticipating how high-cost therapies will impact their bottom line. 

Part 6: Health Care Delivery Key Takeaways

• Employers are pursuing various delivery reforms at the same rate as last year with the exception of virtual-first solutions, which may see a slight decline in employer adoption. 
• Employers cite transparency of quality data, navigation to higher quality providers and sites of care and reducing inappropriate care as the top actions to impact the quality of care. 
• Employers’ top concern about virtual care is how well it can be integrated into the broader health care system and programs. 
• Call to action for employers: Employers have a clear view of what can impact health care quality. As part of their strategies, employers should assess vendor and plan partnerships specifically focused on high-quality provider networks and redouble their efforts to steer employees to them. 

Part 7: Health Equity Key Takeaways

• In 2025, 85% of employers will collaborate with employee resource groups (ERGs) to promote benefits and well-being initiatives, making it the primary way employers are working to reduce gaps in health equity. 
• To address affordability and access, 83% of employers are committed to adopting at least one major strategy by 2025, including designing pharmacy benefits that remove cost barriers for generics and preventive medications and introducing health plans with lower deductibles. 
• By 2025, 89% of employers are set to implement specialized health strategies for LGBTQ+ employees, with 76% already providing comprehensive gender-affirming care. 
• Employers continue their quest to better support women’s and reproductive health, from expanded coverage of postpartum depression treatments to more robust preventive care coverage and coverage of doula services for expecting parents. 
• Initiatives for employees with disabilities or who are neurodiverse are also growing, with 70% of employers developing targeted health strategies to meet their specific needs. 
• Call to action for employers: As employers continue their health equity efforts, they may observe that needs evolve over time. Additional programs may not always be the answer. Employers should evaluate evolving needs within the context of their overall health and well-being strategy to ensure efforts are meaningful and sustained. 

Part 8: In Conclusion: 2025 Priorities Key Takeaways

• Given the dramatic increases in health care cost trend, including escalating pharmacy expenditures, it’s no surprise that 53% of employers are now focusing on health care cost as their highest priority for 2025, followed by affordability for the organization and employee experience. 
• They are working to accomplish these goals by taking a comprehensive look at the quality of their partnerships, the value of the services delivered by their partners, transparency of data shared and their partners’ accountability as fiduciaries. 
• At the same time, employers are determined to continue providing well-rounded health and well-being benefit packages, supported by a health care strategy grounded in achieving lower cost through the improvement of quality and experience. 
• The next 3 years will be telling of employers’ ability to keep costs low while remaining competitive for talent and persisting in a highly inflationary global environment.