In 2017, legendary investor Warren Buffett famously stated, “Medical costs are the tapeworm of American economic competitiveness," indicating in no uncertain terms that rising healthcare costs are the number one problem facing American businesses. Currently, healthcare spending represents approximately 18% of America’s total Gross Domestic Product (GDP) and nearly double per capita compared to other developed countries. To make matters worse, life expectancy is far less than that of comparable nations even after adjusting for age and non-treatable causes of death. Despite these facts, the cost of healthcare continues to rise, consistently outpacing inflation and overall economic growth. Whether you are a business owner, community leader, or industrial worker, you can relate to the pressure from rising healthcare costs and its consequences.

According to the Greek philosopher Heraclitus, “The only thing that is constant is change.” This certainly rings true for the year ahead in the world of employee benefits and human capital management. While not an exhaustive summary of the changes to come, the following touches on some of the key trends and area of focus for employee benefits in the near future.

Whether you sponsor a self-funded or a fully-insured medical and prescription benefit plan to your employees, there is a good chance you purchase drugs through a Pharmacy Benefits Manager (PBM). There is also a high probability you are completely unaware of what a PBM is and how it operates. You’re not alone!

Blog updated on March 27, 2017 to reflect most recent data.

According to Express Scripts’ 2016 Drug Trend Report, national prescription drug spending increased just 3.8% in 2016, down from 5.2% in 2015 and a whopping 13.1% in 2014. This may very well come as a surprise to those who have witnessed prescription drug claims jump from 18-20% of their total medical and Rx spend to 35% and greater. Don't worry, you're not alone!