Employer-Driven Health Care Poised for Change

J Clin Pathways. 2025;11(3):31-32.

For years, employers have struggled with rising health care costs while trying to provide competitive benefits that keep their workforce healthy and engaged. Traditional models of benefits management have long been dictated by insurance or plan administration intermediaries, rigid formularies, and an outdated, nontransparent claim cost structure that prioritizes short-term savings over long-term health outcomes.

However, a new era is emerging for commercial insurance plans, driven by legal and financial concerns. Employers are leading this change by leveraging data-driven decision-making, engaging in direct-with-manufacturer collaborations, and pur­suing predictive benefit modeling to create sustainable, em­ployee-centric plans.

A recent Kaiser Family Foundation national survey under­scores the growing financial issues facing employers and their plan members. Rising cost trends are unsustainable, as the average employer-sponsored health care premium surged to $25 500 per family in 2024. In particular, small businesses are feeling the brunt of these increases.¹ As plan members, em­ployees expect better coverage. According to the survey, over 42% of workers would leave their jobs for a company that offers superior health benefits.¹

In 2025, employers continue to raise financial concerns, including the total cost of care, premiums, and out-of-pock­et costs by employers and their plan members. These issues impact the balance between access and cost in insurance plan design. The current commercial health care ecosystem fails patients, as employees struggle to access the medications and therapies needed due to formulary exclusions and high out-of-pocket member costs. Similar to noncommercial and government-sponsored plans, research and lawsuits have in­creasingly found that third-party formulary-driven coverage has not been as beneficial for plans or patients.

These issues are becoming more frequent, with novel and more expensive brand therapies becoming more common vs traditional generic prescription drug therapies. So, what’s the solution? There needs to be a shift in how health care benefits are structured and delivered. This can be accomplished by es­tablishing full patient-journey pathways for clinical effective­ness and providing a balance between clinical access and finan­cial cost to deliver optimal outcomes.

For more than a decade, key strategic trends around health care decision-making have focused on clinical effectiveness as an important balancing effort.2 Financial and ethical issues in routine clinical care with novel therapeutic approaches hinder clinical effectiveness and create mistrust among patient care stakeholders in such a model.³ In 2025, this remains an open issue to be addressed.

Originating in hospitals, risk management has been rec­ognized as an important part of clinical decision-making. The best opportunity to use this approach is when financial risk can be integrated into the development and implemen­tation of clinical guidelines, thereby reducing unwarranted variation in financial and clinical outcomes.4 Limitations to risk management include actionable data that can be used in a clinical effectiveness process for health care leaders in finance or clinical care.^4,5

For years, many employers have initiated benefit design chang­es. In the traditional employer plan timeline, such changes could take from 12 to 48 months depending on the size or complexity of the plan. This slow-moving bureaucracy has created problems for employers, as faster-moving, technologi­cally innovative products hit the market at higher care claim costs. Instead of reacting to rising costs, forward-thinking em­ployers are proactively designing benefit models with strategic vendor contracts that move the market more quickly toward the following goals:

• Give employees direct access to novel specialty therapies and personalized medicine without the constraints of outdated insurance formularies using prior approval (PA). Examples of this include a carve-out, some form of reinsurance, or no PA through a designated site of care. All come with limited sustained value and utilization.
• Reduce catastrophic claims by leveraging artificial intelligence (AI) and predictive analytics. This early stage of predictive analytics takes significant program effort, costly data storage or analytic services, and has been limited in scope to highly controlled practices or specific rare diseases. Uncertainty in inputs within complex models or lack of holistic pathways can limit decision-making value for preventative strategies and tactics.
• Collaborate, not contract, directly with biopharmaceu­tical manufacturers to negotiate costs and improve access. Examples in this arena have been limited to clinical research scenarios around access and modeling economic value. Other than traditional contracting strategies, little innovative change has occurred in commercial insurance negotiation strategies outside of Medicare.
• Move toward value-based models that reward preventive care, ensuring long-term sustainability. Examples have varied widely, and some models have evolved differently based on the perspective taken by the model, such as an employer vs commercial managed care third-party entity. This area is still evolving as cost concerns have escalated in 2025.
• Move toward value-based models that leverage clinical-effectiveness structures, reward preventive care, and ensure long-term sustainability.

As employers pivot benefits models, clinical pathway tools also need to evolve beyond their current limitations or areas of focus. Insights gained across the patient journey for holistic financial and optimal outcomes can deliver improved plan per­formance solutions that employers are seeking. Pathway devel­opers moving into the real world, near real-time, should find a more welcoming market response due to current trends. As a result, the marketplace could achieve the desired balance in clinically effective plan designs.

Commercial insurance plans continue to face a rising tide of in­creasing claim cost trends and employee demands for better plan coverage. Balancing economic and clinical elements through a clinical effectiveness strategy for personalized medicine or novel therapeutics can better serve employers, as it has for hos­pitals. Clinical-effectiveness–oriented, whole-patient journey pathways are needed as part of the empowerment movement, which is finally starting in employer commercial insurance. Employers that embrace this next-generation empowerment approach are not only reducing costs by double digits, but are also building a healthier, more engaged workforce that trusts their employer to provide real health care benefit solutions.

The question isn’t if or why employers will make this shift, it’s who and how fast. Innovation in medical technologies and therapeutics are happening at an increasingly faster pace. Stake­holders who are collaboratively working with employers who act now will gain a competitive advantage in the evolving com­mercial health care benefit plan landscape.