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A new survey suggests employers will spend nearly 8% more on healthcare costs in 2025—the highest amount in over a decade.
And no, it’s not just inflation doing the heavy lifting, according to the 2025 Employer Health Care Strategy Survey that nonprofit Business Group on Health released August 20 with polling results from 125 employers across various industries.
Drug spending, in particular, is at least partially to blame, the group said in a press release last Tuesday. Employers are seeing their budgets eaten up by pharmacy costs, which in 2023, accounted for 27% of healthcare spending, up from 21% in 2021.
The GLP-1 craze isn’t helping, either, per the release, with nearly 80% of employers seeing an uptick in interest for obesity and diabetes medications.
“It is therefore no surprise that 96% of employers expressed concern about the long-term cost implications of GLP-1s,” the group said.
Meanwhile, the survey named cancer as the No. 1 condition driving healthcare costs, followed by musculoskeletal conditions and, increasingly, cardiovascular conditions.
So, what’s the strategy? Employers plan to tighten the screws on vendor partnerships, according to the August 20 release, aiming to get more bang for their buck and boot poor performers.
They’re also hoping to prioritize preventative care, and push for plans to provide more transparent cost and quality data to help inform future partnership decisions.
In particular, 73% said they wanted more transparency about pricing and contracting of pharmacy benefit managers, according to the 2024 report.
According to last week’s release, one thing most will likely not cut in 2025, however, is mental health care: 79% are prioritizing these services for the coming year, with many employers continuing to offer no- or low-cost virtual counseling.
In short, if you’re in the healthcare game, it’s time to buckle up because 2025 is shaping up to be a year of tough decisions and tighter budgets.