In 2025, employers are expected to pay more than $16,000 per employee in healthcare costs, an employer-specific increase of 9% from 2024.
This is significantly higher than the 6.4% increase experienced by employers from 2023 to 2024 — and a reflection of an ongoing trend that estimates a 5.3% average spend increase per year through 2030.
At the same time, average out-of-pocket cost increases for consumers have consistently matched that growth figure, partly due to the increased usage of high-deductible health plans (HDHPs), which lower overall premiums by shifting healthcare costs to the employee, creating the potential for unexpected and unsustainable financial burdens.
As we look to the rest of 2025 and beyond, Vālenz Health® and our iThrive Customer Council are committed to alleviating this financial strain for both employers and employees using innovative, cost-containment strategies that minimize costs without compromising quality of care.
And, in today’s guide, we’ll share four of those strategies for your consideration.
Editor’s note: This blog is part of a three-part series addressing the iThrive Customer Council’s top priorities for 2025. Read the annual report in full here.
With the ever-upward trend of healthcare costs in the U.S., it’s no wonder that 36% of employers cite “cost-containment” as a primary driver for considering health plan alternatives.
However, with benefits packages of key importance in hiring and retention, there is a delicate balance to be maintained between reducing employer costs and maintaining employee satisfaction with their healthcare coverage.
A disconnect already exists: While 83% of employers think their employees are satisfied with their benefits, just 61% of surveyed employees said their employer offers a range of benefits that meets their personal and household needs, cost included.
To that end, the iThrive Council is committed to exploring strategies that enhance affordability for all parties involved and improve employee health plan experience in 2025 — four of which are discussed below.
The best way to contain healthcare costs for both employers and employees is by starting with the source: billing inconsistencies.
Each year, the healthcare industry loses an estimated tens of billions of dollars to fraud, waste, and abuse in insurance claims. And, while not all improper billing practices are fraudulent in nature, these errors are common enough that the financial burden has been passed along to employers and employees in the form of higher premiums and out-of-pocket expenses.
Fortunately, plan payers can proactively identify and resolve surprise billing and overpayments with a comprehensive payment integrity solution suite.
Programs such as line-item bill review, in- and out-of-network repricing, and ABN medical necessity validation deliver smarter cost containment, reduce administrative burden, and improve pricing transparency for employers and employees alike. And, when these solutions are implemented across the Claim Cost ArcSM, they can prevent costly overpayments and inaccurate billing before those funds are ever paid.
Learn more about how these payment solutions can help you balance costs for both employers and members by reaching out to Valenz today.
Pricing and quality transparency are equally important when it comes to cost containment for employers and members. After all, if a member is aware of how prices can and do vary by facility and provider, they’re more likely to choose affordable options up front — reducing unexpected out-of-pocket costs and unnecessary spend for plan payers.
Pricing transparency tools such as Valenz Bluebook’s Provider Directory can help employees make informed, affordable healthcare decisions. Using a “red-yellow-green" rating system, the directory highlights those procedures, providers, and facilities that provide the highest-value care at an affordable price (our Fair PriceTM estimates).
By empowering health plan members with the data they need to make smarter healthcare decisions, price and quality transparency can significantly reduce plan spend and reverse the trends of rising healthcare costs for all parties.
Traditional fee-for-service programs incentivize healthcare spend by encouraging higher-cost treatments and the resulting profit. It’s no surprise, then, that alternative cost-sharing programs, like the variable co-pay model, are gaining in popularity.
Unlike traditional models, a variable co-pay strategy focuses on care quality outcomes rather than the number of services provided. By taking a proactive approach to care, variable co-pay models incentivize members to choose high-quality, low-cost providers and preventative care choices that significantly reduce high-cost claims from complex healthcare conditions down the line.
By implementing a well-structured variable co-pay model, employers create a win-win situation: lower costs for their business and improved healthcare affordability for employees.
Finally, one of the most effective ways to reduce employee healthcare expenses (and resulting plan spend for employers) is with personalized care navigation that guides them toward high-quality, low-cost options for their specific healthcare needs.
Features such as care and disease management provide members with personalized guidance direct from medical professionals, enabling them to better understand and handle their conditions, medically and financially. By identifying and providing the best care options based on members’ income, location, and healthcare needs, care navigation services not only significantly reduce out-of-pocket spend; they also improve overall care outcomes and member healthcare literacy, which lead to compounding savings over time for both employers and employees.
Learn more about how Valenz NaVcare care navigation services can help you optimize your healthcare plan usage by contacting a team member today.
While these strategies are a great place to start when minimizing healthcare spend for both employers and employees, there’s no “one-size-fits-all" solution. The most effective strategy for each organization will be highly dependent on the specific needs of the employer and their employees.
As 2025 progresses, the iThrive Council plans to evaluate the effectiveness of the aforementioned strategies across our client portfolio and identify those with the most promise of mitigating costs for all parties involved.
In the meantime, if you wish to explore cost-containment strategies for your health plan, reach out to a Valenz team member below. We can help you build a personalized strategy that reduces costs for both employers and employees and delivers smarter, better, faster healthcare to all parties involved.