By Pension and Benefits Editorial Staff
Projected increases in health plan costs for 2020 are similar to 2019, but increases for high-cost specialty prescription drugs will continue to skyrocket, according to recent research from The Segal Group. The 2020 Segal Health Plan Cost Trend Survey found that most medical and prescription drug plan cost trends are projected to be 7 percent for 2020. In addition, cost trends projections for outpatient prescription plans are projected to be lower than 2019 projections. However, projected trend for specialty drugs will increase by more than 15 percent—more than double the projection for outpatient prescription coverage.
Segal noted that pattern is cause for concern because while specialty drugs only represent 2.2 percent of all pharmacy claims, for some plan sponsors, they account for 50 percent of total prescription spending. Factors driving specialty drug trend include price increases of existing specialty drugs, the high cost of new specialty drugs being introduced that are replacing lower-cost therapies, and the slow introduction of biosimilars into the marketplace. The slow adoption rates for biosimilar drugs are driven by several factors, Segal found, including physician resistance, anti-competitive tactics taken by drug manufacturers and restrictive distribution contracts that limit supply chain options. A combination of these factors limit the forces that could help lower overall prices of specialty drugs.
Cost management strategies. Plan sponsors continue to use various cost-management strategies to help mitigate increasing health plan costs. Segal found that the use of transparency tools is at the top of the list for 2019. The need for consumer access to price and quality transparency to make better decisions about providers and services is still an ongoing concern for many plan sponsors and other consumers of health care.
The top five health plan cost management strategies in 2020 are:
- Health care transparency tools
- Prescription management for nonspecialty drugs
- Prescription management for specialty drugs
- Telehealth/virtual care
- Value-based contracting
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