While health insurance is a leading business expense for many employers, it’s also a crucial one for recruiting and retaining workers. As healthcare costs continue to rise, employers are increasingly challenged to provide access to affordable care for their employees while also minding the bottom line on business expenses.

Fortunately, there are solutions to help businesses big and small provide quality healthcare coverage at an affordable cost. Capital Blue Cross has proven strategies that can help – strategies that go beyond a one-size-fits-all solution to tailor coverage options to the needs of both employers and their employees.

What’s driving healthcare costs?

There are multiple factors, including the same inflationary forces that are affecting so many goods and services. Healthcare, however, has some unique cost drivers of its own, including:

  • Health system consolidations: From 2012 to 2022, the percentage of doctors in private practices fell from more than 60% to less than 47% as hospitals bought up smaller practices. This trend, along with larger mergers and acquisitions among health systems, can reduce competition and drive up costs.

  • New medical technologies: As medical science advances, so do the tools and techniques used for care. But progress has a price tag, and more advanced, high-tech care often comes at a higher cost.

  • An outdated payment model: Providers are often paid for the quantity of tests and treatments provided rather than the quality and effectiveness of those services. Capital advocates a value-based model that rewards providers based on how much they help patients improve their health.

  • Prescription drug costs: Nearly half of Americans routinely take a prescription medication. Nationwide spending on retail prescription drugs has steadily increased for decades, exceeding $460 billion in 2024. The popularity of GLP-1 drugs for weight loss and diabetes has further fueled pharmacy spending.

  • Deferred care: Some consumers put off care during the COVID-19 pandemic, skipping preventive checkups and elective medical procedures. Now people are catching up on their care, and healthcare utilization is surging. The prevalence of chronic diseases like diabetes, obesity, and heart disease have only added to the demand.

These cost drivers are not unique to our market. Employers across the country are seeing costs escalate faster – a trend that’s expected to continue.

Factors driving healthcare costs

Capitalize on strategies to cut costs, not care

One of the most effective ways employers can help curb rising healthcare costs is to do a periodic checkup of the coverage you offer your employees. Capital Blue Cross can help. We can use data and analytics to identify the trends and cost drivers impacting your budget and offer solutions that save money while still promoting quality care.

We have tools and resources that can help engage your employees in preventive care, better manage chronic conditions like diabetes and heart disease, and control your pharmacy spend.

If your business has concerns about healthcare spending and you want to find the best ways to keep ahead of costs, schedule a health insurance check-up with us. We can help you capitalize on the many tools and strategies Capital Blue Cross offers.

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