Trends to Watch in 2023

Several macro-level trends are expected to impact employer health and well-being initiatives in 2023.

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November 17, 2022

Every year, Business Group on Health creates “trends to watch” for the coming year. Each trend relates specifically to employer health and well-being strategy, yet often is impacted by broader factors such as the global economy, workforce trends, innovation and the policy/regulatory environment.

Factors currently affecting employers include labor shortages, increased cost of health care, post-pandemic health care needs, global inflation, supply chain challenges and regulatory compliance. They have all played a part in the development of Trends to Watch in 2023:

As Health Care Costs Rise, Affordability is Top of Mind – for Employees and for the Business

As health care costs rise, affordability is top of mind– for employees and for the business.

After several years of predictable health care cost increases, employers will be facing above average increases in health care costs, driven in part by pent-up demand for medical services. According to the 2023 Large Employers’ Health Care Strategy and Plan Design Survey, 43% of employers have already witnessed an increase in medical services due to care delayed during the pandemic, and another 39% anticipate seeing the same in the future. One condition group in particular—cancer—is fueling employer concern as well. Cancer is now the top condition driving health care costs and trend, as more late-stage cancers are identified and more expensive treatments are becoming available.


In an effort to maintain affordability for employees, these cost pressures aren’t being passed on to them via increases in premiums and out-of-pocket costs. For the most part, employers are absorbing these increases, as employee cost sharing remains virtually unchanged in 2022.

The pressures inflation and provider shortages place on health care services and supplies may be the final straw in the coming years, making affordability a critical trend to watch in 2023. As the economy continues to fluctuate, the ability for employer plans to absorb escalating health care costs may soon reach a limit. Toward the latter half of 2023 into 2024, increased health care costs are likely as new provider contracts are executed, which will probably reflect pent-up demand plus higher labor costs in the health care sector.

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Shifting Workforce Dynamics Playing Out in Health and Well-being Offerings

Organizations will continue to balance numerous external and internal factors, many of which directly or indirectly impact the dynamics between employees and their employer. Related to this, employers are increasingly recognizing the effect of health and well-being on their overall workforce strategy: 65% of employers see health and well-being playing an integral role in their workforce strategy, up from 27% just 5 years ago.

Employers will continue to invest in health and well-being and view these investments as part of a long-term workforce strategy. There will be challenging decisions in the years ahead relative to affordability, likely leading to a reprioritization of initiatives, new partnerships and collaboration with employees to bring relevant offerings to the workforce, as well as a broader communication effort for employees and their families.

Shifting workforce dynamics playing out in health and well-being offerings.

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Employers Will Address Health Inequities in a Multitude of Ways

Employers will address health inequities in a multitude of ways.

Employers have long been focused on addressing the unique health and well-being needs of marginalized and under-resourced populations within their workforce. Affordability will further impact health equity and access to care in 2023 as health care cost pressures come to bear. To address these issues, employers will continue to focus on Social Determinants of Health (SDOH) through their health and well-being programs, with an emphasis on health care access, finances/income and childcare.

Employers are continuing to address health equity within their diverse workforce by expanding coverage and benefits for neurodiverse populations and transgender individuals. There is also an increased recognition of the importance of making disability inclusion a key part of Diversity, Equity and Inclusion (DEI) initiatives.

Employers are prioritizing women’s health in very specific ways related to reproductive care: expanding fertility benefits to cover all types of families, addressing maternal mortality for under-resourced populations and coverage for doula services for expecting parents. In 2023, employers will be intentional about the areas of health equity most concerning within their workforce and will then design programs and solutions to address those areas.

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Programs that Support People in Tough Times Become Even More Critical

Employers have fully embraced multidimensional well-being strategies as a growing body of evidence shows that supporting employees holistically has far greater impact than a singular focus on physical health. Mental health will continue to be a top priority among employers and employees, recognized as inextricably linked to other dimensions of well-being, including physical, financial and social health, as well as job satisfaction.

Recognizing increasing financial pressures, 94% of employers have a financial component in their overall well-being strategy. While retirement savings is still a major part of employer financial well-being, many are helping employees with their day-to-day financial priorities by offering tools and resources to support challenges like saving for emergencies, paying down debt, creating a household budget, gaining early access to earned wages and paying for college.

Programs that support people in tough times become even more critical.

This broader view of employees’ financial lives that encompasses both the present and future is based on the understanding that stress about money impacts employee physical and mental health, productivity and performance. This situation will become even more acute due to the economy and inflationary pressures placed on household budgets.

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Back to Basics When it Comes to Value

Back to basics when it comes to value.

With rising health care costs, disappointing patient experiences, declining life expectancy and subpar outcomes, employers and others are eager to see more rapid progress in the adoption of value-based payment models. These models tie provider reimbursements to improved patient experience, cost mitigation and improved outcomes. Advanced primary care, high-performance networks (HPN), accountable care organizations (ACOs) and centers of excellence (COEs) are examples of these payment models. The call for value payment and measurement extends to point solutions, as employers seek validation of favorable economic and clinical impact. Furthermore, these models are crucial in both in-person care settings and virtual care. Without widespread adoption of value-based payment models, truly sustainable industry transformation will not materialize.

When the primary driver of financial success for providers is keeping patients healthy – rather than billing for more services – they can afford to deploy team-based care. Evidence also suggests that when providers have financial incentives to improve care for all patients, their performance on quality metrics can improve while simultaneously reducing disparities in outcomes.

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Virtual Health is at a Critical Crossroads

Pre-pandemic, virtual health – which includes telehealth for primary and acute care, teletherapy, chronic condition management, navigation services and many others – had been building steady momentum as an alternative to in-person care. As we emerge post-pandemic, virtual health is increasingly viewed as a complement to in-person care. While future growth in virtual health is anticipated, concerns remain.

According to our 2023 survey, 55% of employers will add to their suite of virtual health offerings despite ongoing concerns that virtual health is adding to an already fragmented and complex system. Virtual health is now at a point of reckoning, with a focus on rationalization in the market, a heightened need for integration with in-person care and high-quality solutions resulting in improved outcomes. Therefore, 2023 could bring a time of transformation for virtual health as employers, vendors and consultants work together to better integrate virtual health offerings to improve the overall employee experience as well as outcomes.

Virtual health is at a critical crossroads.

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Policy and Regulation Impact Access to Health Care

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As governments around the world evolve their strategies to address their population health and well-being needs, employers will continue to be impacted. Governments will look to employers for support and resources to communicate and facilitate public programs as well as, in some cases, provide coverage and services directly or in partnership. In light of global economic volatility, persistent health care needs, increasing costs, provider shortages, and introduction of new, expensive medical and pharmaceutical treatments, we expect employers will need to stay engaged in civic discourse to understand and help define their involvement and responsibilities.


In the U.S., 2023 will bring deepening uncertainty regarding state vs. federal requirements and restrictions for employer-sponsored plans. Additionally, long-standing precedents like ERISA preemption and Affordable Care Act preventive services are under judicial review and ultimately may add to the shifting dynamics that employers will have to navigate. This ongoing flux underscores the importance of employer engagement and the value and stability of employer programs to provide the health and well-being programs needed by America’s working families.

It is vital that employers continue to view their role as a partnership with policymakers in order to ensure appropriate expectations and continued alignment. Whether improving access and affordability for mental health, women’s health, pharmaceuticals and other medical needs, or transforming delivery through transparency and payment model reform, the Business Group anticipates that large employers will continue to lead, engage and inform progress across the spectrum of global challenges.

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Looking ahead to 2023, these trends will be top of mind. Employers will continue to innovate to address increasingly complex and critical issues. They will be looking to expand and strengthen partnerships to drive transformative and sustainable approaches as an industry.

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TABLE OF CONTENTS

  1. As Health Care Costs Rise, Affordability is Top of Mind – for Employees and for the Business
  2. Shifting Workforce Dynamics Playing Out in Health and Well-being Offerings
  3. Employers Will Address Health Inequities in a Multitude of Ways
  4. Programs that Support People in Tough Times Become Even More Critical
  5. Back to Basics When it Comes to Value
  6. Virtual Health is at a Critical Crossroads
  7. Policy and Regulation Impact Access to Health Care