According to a new report by Kaiser Family Foundation, just 1.3 percent of people with healthcare coverage from their employers accounted for 20 percent of total health spending in three consecutive years (2015-2017).

Because of the year over year consistently high spend of this population, the report concluded that “any efforts to reduce the total costs of care and improve health system quality must focus heavily on this group of people,” which Kaiser defines as “persistent high spenders.”

These “persistent high spenders” often have complex diseases that require frequent and costly care, as well as high cost medications. Conditions could include HIV, MS, cystic fibrosis, rheumatoid arthritis, diabetes, cancer and other serious diseases.

How does this impact Hoosier employers and their employees?

Forty-nine percent of Indiana employers offer high deductible health plans (HDHPs) to their employees, which is much higher than the 29% of employers across the U.S. These particular patients quickly reach their deductibles – even with support from drug companies’ copayment assistance programs – and then become a financial burden on their employers.

Thankfully, the Internal Revenue Services (IRS) has released Notice 2019-45 to add care for a range of chronic conditions to the list of preventive care benefits that can be provided by a high deductible health plan (HDHP) without imposing a deductible. The expansion is intended to help remove cost barriers to care that may cause chronically ill patients (some “persistent high spenders”) to discontinue use of important and often life-saving medications or treatments.


Medications for these diseases are often lifesaving, so employers should work to ensure barrier-free access. But they should do this in the most cost-efficient manner by working with a benefits adviser who understands strategic plan design that maximize cost-savings opportunities. For example, there are many savings opportunities available through Pharmacy Benefit Managers (PBMs) and the pharmaceutical industry that do not result in cost-shifting to patients or excluding coverage to these important treatment options.

Particularly for self-funded employers, they should ensure their PBM has the interest and capabilities to use available tools to balance cost and utilization.  Unfortunately, some PBMs actually benefit financially from the rebates available with these high cost medications and do not have an aligned incentive with their employer clients to manage cost and utilization.


With 30 to 35 new specialty medications likely to be approved each year for the foreseeable future, mitigating future disease risk and demanding more transparency in drug pricing is as much or more important than addressing current health costs.

It’s those employers that want to retain a good workforce by being responsible for the quality and cost of their employees’ health care that must lead by demanding more transparency. See “Responsible parties must own their role in sky-high drug prices” for more information and specific ways employers can take action today.


If you’re ready to work with a strategic advisor who understands designing benefits programs that maximize cost-savings, contact us.