In the face of rising health care costs and an ever-evolving healthcare landscape, employers are increasingly tasked with managing complex health benefits while ensuring their employees receive the care and support they need. 2025 will bring new challenges and opportunities, with rising health care costs, the ongoing focus on mental health, and the increasing demand for more advanced care models.
According to the Business Group on Health, employers will focus on seven key areas of healthcare in 2025.
Health care costs are growing at historic rates.
Employers must tackle rising pharmacy costs to control overall expenses.
Employers may need to defend physical well-being programs; more sophisticated approaches are needed.
Progress has been made in mental health, yet more challenges lie ahead.
Employers and vendors must better enable employees to find the right support at the right time.
Employers will hold their vendor partners to higher standards.
U.S. policy changes and global economic shifts will affect both employers and employees.
These trends can be summarized into two main categories: rising costs of care and continued partnerships with digital health vendors. We’ll explore each area and how it will impact employers and their employees in 2025.
Health Care Costs Continue To Rise
From 2022 to 2023 health care costs grew 6.8% and are projected to increase by over 50% from 2017 to 2025. Unless we start approaching healthcare in new ways this growth shows no signs of slowing.
The rising cost of health care is one of the biggest financial challenges employers face today, directly impacting their bottom line and employee satisfaction. Understanding the factors driving these costs is the first step in addressing them. A few of the major factors contributing to these rapidly rising costs include:
Advance medical technology
Aging population
Pharmacy costs
Increase in chronic conditions
The cost of insurance premiums, deductibles, and out-of-pocket expenses for employees continues to climb, creating financial strain for employers and employees alike. Between 2023 and 2024, total healthcare costs—including employee out-of-pocket expenses, employer contributions to health accounts and premiums, and employee premium contributions—rose by almost $1,500. Of that increase, employers chose to absorb almost 90% of that through higher contributions to premiums. But at that rate of growth, employers will need to make difficult decisions in 2025 and may need to move more of that increase onto their employees.
Pharmacy costs have surged in recent years, driven by both the rising use of prescription drugs and the increasing costs of medications, placing a significant strain on both employers and employees. In 2023 alone, employer pharmacy benefit costs saw an 8.4% increase year over year, compared to 6.4% in 2022.
Chronic conditions like diabetes, heart disease, and obesity contribute significantly to rising expenses. An estimated 42% of non-elderly patients (57.4 million adults under 65) with private insurance were deemed eligible for GLP-1s in 2023. Some employers have started making hard decisions to narrow coverage of GLP-1s to just those diagnosed with Type 2 diabetes in an effort to mitigate some of the increasing costs.
In 2025, benefits leaders will take a hard look at new ways to drive down costs. By investing in whole-person preventative health, employers can save on future medical expenses while fostering a healthier workforce now. Preventative care, which focuses on early detection and lifestyle management, is an effective strategy to address healthcare costs before they become unmanageable.
Preventative care can help identify health issues early, reducing the likelihood of costly interventions later.
Regular screenings and wellness checkups help catch chronic conditions early, leading to more effective management and lower long-term treatment costs.
Encouraging healthy lifestyle changes (e.g., smoking cessation, healthy eating, exercise) can reduce the incidence of preventable diseases and the associated costs.
Employers must look beyond traditional models and explore innovative solutions that can help limit unnecessary costs while still providing high-quality care. Could Advance Primary Care (ACP) be the answer? Many employers seem to think so—63% will have at least one ACP strategy in place in 2025.
63% of employers will have at least one APC in place in 2025
apree health’s ACP model emphasizes strong, personalized 1:1 patient-provider relationships, focusing on whole-person health. Integrating preventive care, chronic condition management, behavioral health, and health coaching with specialized education in areas like diabetes and nutrition, offers a comprehensive approach with most services under one roof.
Our model aligns payers, providers, and patients by prioritizing both patient experience and clinical outcomes. We track seven key HEDIS metrics across preventive services (e.g., cancer screenings), chronic disease management (hypertension, diabetes), and mental health. This focus shifts attention from traditional reimbursement structures to better health outcomes.
apree health combines expert clinical care with care navigation to engage employees in managing their health. Primary care providers, behavioral health professionals, health coaches, and Care Guides ensure employees have access to high-quality, coordinated care. Care navigation, both digital self-service and human touch, is critical in empowering employees to make informed health decisions and avoid unnecessary treatments and costs.
Care Guides help employees navigate complex healthcare systems, maximizing benefits and ensuring timely access to the right care. They provide concierge-level support, resulting in a reduction in overall healthcare costs. A recent study showed that employees who used Care Guides experienced an average reduction of $33.83 in monthly health care spending in the six months following their initial interaction.
Health coaches provide personalized support to employees with chronic conditions, offering guidance on lifestyle changes, medication management, and preventive practices. apree health’s GLP-1 focused medication management and weight loss program integrates technology to ensure continuity of care, tailored to members’ needs including weight management, Type 2 diabetes, and seeking alternative methods after prescription denial. Members are placed on one of two paths—either a medical management plan for those with specific BMI and chronic conditions, or a lifestyle management path—with support from health coaches and a multidisciplinary team to help achieve their health goals.
Digital Health Partnerships Aren’t Going Anywhere
HR benefits leaders spend months hand-selecting health and wellbeing solution vendors to partner with. Point-solution partnerships aren’t going away but employers will push to hold vendors to a higher standard. In 2025, employers will hold these vendors more accountable for ROI and employee engagement.
On average, employers offer more than 12 health-focused solutions to their employees. With an increased number of vendors in the employers’ ‘network’, employees are often lost and unaware of what they have access to. In fact, 76% of employees don’t understand their benefits and only 10% make use of them.
76% of employees don’t understand their benefits and only 10% make use of them
Many different point-solutions have given employers the ability to build very customized health and wellness programs focused on the needs of their specific population, however, the use of all these different solutions has increased fragmentation in healthcare. Employers will look to vendors to help solve this problem and bridge gaps. Many vendors already understand that they’re not solo players offering a single solution but, instead, they’re part of a larger healthcare ecosystem. To effectively serve members, they need the capacity to work with other health solutions, identify trusted resources, offer referrals, and share data.
As budgets get tighter, benefits leaders will ask vendors to take it one step further to prove ROI and increase member engagement. Employees are looking for a solution relevant to their needs at that moment. In fact, 80% of employees would use their benefits more if offered a more personalized experience.
apree health offers best-in-class engagement through a fully integrated care navigation and wellbeing experience, powered by a robust ecosystem of point-solution partners. Partners are seamlessly integrated into the digital app, creating a single front door for members to access support. This digital hub covers 20+ health and wellbeing categories through partnerships with over 30 trusted vendors, including Hinge Health, Maven, Livongo, Headspace, and many more. We ensure that point-solutions are targeted to the right populations based on claims data, health risk assessments, and more.
Care Guides and primary care providers (PCPs) also have access to technology that shows which vendor solutions are available through employers, allowing them to incorporate these resources into personalized care plans. For example, if a provider sees a patient with back pain, they can “prescribe” Hinge Health as part of the care plan before making a referral to physical therapy.
apree health — Personal, Integrated, and Proactive Care
Even with the large increases in total costs of care, employers are determined to continue providing comprehensive health and wellbeing benefits. To do this, there will be a push to lower costs while maintaining quality personalized care.
apree health combines a top-tier navigation platform with clinical advocacy and advanced primary care to deliver a superior health experience, enhance outcomes, and reduce the overall cost of care. apree providers take a whole-person approach—meeting every member where they are at in their health journey and engaging them however they prefer, digitally, over the phone, or in person. This new approach offers employers benefits like:
Reduce healthcare costs – gain greater control over benefits and plan design, reduce overall health care costs, and avoid the cycle of rising expenses that force employers to make cuts or shift costs to employees
Reduce absenteeism and increase productivity – foster healthier employees who are happier, more present, and more engaged, while empowering them to take greater ownership of their health through a care model focused on preventive care and overall wellbeing
Improved health outcomes – employees can address health issues early, reducing the need for more expensive treatments later and ultimately leading to better long-term health outcomes
Improve talent acquisition – today’s workforce (the largest percentage of which is made up of Millennials) is looking for better health care options that are convenient, meaningful, and focused on their holistic health.
In 2025, employers who embrace innovative, integrated care models and forge stronger partnerships with digital health vendors will be better positioned to manage rising costs while enhancing employee health and satisfaction.
