June 02, 2026

Introduction

It’s long been known that the healthcare delivery model is ripe for disruption. This is also true for the employer-sponsored healthcare system. Healthcare costs have been increasing for years, with no signs of abating. In 2026, employers anticipate a median increase of 7.6% after plan changes – the highest percentage increase in healthcare costs in more than a decade.¹

Despite employer investments in health and well-being—and professed impacts lauded by their vendors—health outcomes continue to plateau or even decline. Key aggregate measures like life expectancy, chronic disease burden, and maternal mortality are worsening in the U.S., and employees perceive their experience of accessing healthcare as increasingly disruptive and unaffordable. In fact, Gallup found that consumer satisfaction with the cost and quality of healthcare has hit a 25-year low.²

Disruption within employee health and well-being programs is a bold change from the status quo. Examples of disruption include how care/medications are paid for, shifts in accountability, a drastically different way of addressing a condition, and a heightened emphasis on value.

While change often insinuates disruption, the status quo in healthcare is disruptive as well. This level of disruption far surpasses any potential improvements within the current system, which aim to tackle cost, quality, and/or experience. As such, employers have a vested interest in driving disruption and play a pivotal role in the process. To reframe disruption as a necessary and positive force, employers need to fully understand the status quo and its “pain points,” as described in the following section. That understanding will help them develop a clear action plan that considers how employees, managers, and the C-suite will be involved in decisions and their role in determining outcomes.

Employer Pain Points: Why Is Disruption Needed?

Costs are increasing and volatile. Over the last 2 years, employers’ actual healthcare costs exceeded their predictions, creating an adverse environment for future years’ budgets.
Healthcare costs, particularly pharmacy and hospital expenditures, are consuming a bigger portion of employers’ total rewards budgets. This shift has contributed to wage compression and has been a factor in changes to organizational staffing models and heightened global competitiveness.
Data often doesn’t integrate across vendors and providers, making it a challenge to measure the impact of investments and make prudent program changes.
Costs are not transparent to employers, impeding optimal decision-making.
Employers are investing an incredible amount of dollars in employees’ healthcare coverage (average of $13,699 per employee¹), yet these investments are yielding subpar outcomes and a lackluster employee experience.
Private payers, including employers, bear a heavier burden of costs relative to public plans (Medicare, Medicaid). Healthcare providers, especially hospitals, cost shift by charging inflated rates to private plans to offset the lower reimbursement rate of public plans.

Employee Pain Points: How Is the Status Quo Failing Patients?

Healthcare costs are increasing for plan members, making coverage and care out of reach for some employees. Premiums are rising at a faster rate than inflation and wage growth. Deductibles and out-of-pocket costs climb year over year.
Employees report low satisfaction with their healthcare experience, which can lead to reduced treatment adherence and a negative impact on health outcomes. Drivers of poor experience include:

Limited access to care/providers: Long waits for appointments or the need to travel for care.
Lack of coordination between care providers: These include PCPs, specialists, clinical solution partners, and pharmacists. As a result, employees need to navigate the system on their own.
Delays in treatment and care: These issues are due to increasing administrative burdens, such as poorly facilitated utilization management and prior authorization.

Lack of transparency of quality and cost makes it difficult for employees to choose a provider. These issues have an impact on employees’ health status, which partially depends on their providers’ ability to provide efficient, timely, safe, and evidence-based care.

These collective pain points illustrate a broken system that benefits neither employers’ nor employees’ best interest. Without employers taking action on the above, these trends will persist, and access, experience, and quality will worsen. To address these concerns, we have listed a series of actions for companies to strongly consider. Recognizing that employers are not a monolith in their approaches and speed of adoption, we suggest that employers evaluate this list and select appropriate actions based on their company’s health and well-being strategy and the needs of their employees.

Disruption Calls to Action

It may feel daunting to take on transformation within health and well-being benefits and the healthcare ecosystem as a whole. It becomes more manageable to view the process as a series of steps that employers can pursue on their own path to bringing about change.

1 | Act with urgency in addressing contributors to healthcare costs. Employers who quickly react to new cost drivers tend to experience lower trend year over year, in contrast with those who wait for proven results. For example, employers can put in a cell/gene therapy center of excellence (COE) now, as these treatments start hitting the market, rather than waiting for the market to mature.
2 | Identify employer and employee pain points that are ripe for disruption (as shown above), using data from health plans, pharmacy, and clinical solution providers, as well as claims analyses from consultants and other sources of information.
3 | Lean into alternative health plan and PBM models, both of which afford more flexibility in design and are more agile in addressing plan and patient affordability. For example, transparent PBMs are typically more flexible in design, allowing employers to target their formulary approaches without the threat of rebate loss.
4 | Design a structure to easily guide employees to quality providers. For example, design network structure configurations that root out lower-quality, higher-cost providers. Embedding COEs, high-performance networks, and advanced primary care will lead to a frictionless experience for employees needing care.
5 | For disruptions that may result in employees assuming more costs, take a thoughtful and analytical approach to cost sharing. Keeping employee costs flat will be extremely challenging in this environment, where medical inflation and chronic condition needs test employer budgets.
6 | Entertain outside-the-box approaches to longstanding problems, like directing employees to a more affordable source of medications under a direct-to-consumer cash-pay source for select medications, if appropriate (e.g., GLP-1s). This change is a true form of disruption that has the potential to bring down costs for both the company and employees.
7 | Evaluate options to bring predictability to healthcare spend – even if those options would be an extreme change. While individual coverage health reimbursement arrangements (ICHRAs) have yet to take hold among self-funded and geographically dispersed employers, they should be included in the suite of options considered.
8 | Design models to motivate and require employees to assume greater accountability for their health, with a focus on getting recommended care, prioritizing well-being, and taking advantage of all the opportunities that employers and their partners provide.
9 | Construct a clear change management approach, specifically within HR/Benefit teams and Finance. These two cohorts will be critical to secure buy-in as a precursor to the next step of educating leadership. Inertia likely exists right within your own benefits team or at the local level, so challenge their thinking by showing the consequence of not taking bold moves to change. HR/Benefit leaders should strive for one common purpose alongside their teams who will be behind much of the disruption. Finance is integral, particularly when making the case for a strategy change in benefits that could impact budgets in the long term.
10 | Educate and engage C-Suite leadership early in the process, using data, experiences, and opportunities. Whether it’s sitting down with your senior HR leader, CFO, or CEO, the information brought forth should be highly tailored to the leader’s decision-making approach. Start with current healthcare costs and illustrate the extreme likelihood that it will get much worse. Follow this with a discussion of the options available (shown above) over the near and long term for tempering the trend.
11 | Communicating to employees is critical. Create a culture of change that focuses on direct, fact-based communication and shared accountability; employees should be part of the solution to tackle healthcare costs (both their own out-of-pocket expenses and the company’s plan costs).

Conclusion

The current state of U.S. healthcare is not adequate or sustainable over the long term. While some employers may hesitate to cause any disruption, it’s important to reframe disruption as a positive force, a means to pursue change for the better. Employers are well positioned to take on the role as “change agents.” They have a burning platform and the leverage to drive meaningful and sustained change.