HUB International

Christine Kates

Health Plan Advisor

Christine Kates, D.O., is the Director of Clinical Consulting for global insurance brokerage Hub International, operating at the intersection of clinical judgement, financial strategy and health plan performance. She specializes in translating healthcare complexity into strategic business intelligence. She helps mid-market and large enterprise employers understand what is driving costs, identifying emerging risks and making informed decisions about benefit plan management.

Thomas Hodges is the Regional Director of Financial Consulting-Employee Benefits for HUB. He has experience in complex financial projects for both self-funded and fully insured clients, with a focus on large employers’ health plans. He oversees claims reporting, renewal projections, utilization reporting, benchmarking, and IBNR analysis. Thomas holds certifications from the National Association of Health Underwriters as well as state health and life Insurance licenses in multiple states. Additionally, Thomas holds two Bachelor’s of Science degrees in finance and risk management and insurance.

Under consideration are a variety of traditional and lesstraditional solutions:

• Half of large (500-plus employees) organizations are redesigning their benefits plans and shifting more costs – higher deductibles and out-of-pocket maximums – onto employees.

• Alternative plan designs – using alternative or select providers and advanced or high performance primary care, among others and are now used by 41 percent of employer respondents to one survey, but that could grow 87 percent with accelerated uptake in the next two years.

• Tightened pharmacy and vendor management is also under study as 61 percent of large employers explore alternatives to standard pharmacy benefits contracts.

Healthcare cost containment is a continued priority for 2026. Achieving it requires employers to team with a knowledgeable brokerage team to put proactive and integrated solutions in place that balance cost control with quality care. Here what’s important to know.

What’s Causing The Pain

The healthcare cost pain points have been well-documented.

Start with skyrocketing pharmaceutical costs. The wildly popular and expensive GLP-1s, for diabetes andobesity, are one factor driving plan costs – increasing premiums by an estimated 1 percent to 3 percent. Wasteful spending – think duplicate tests and procedures and undetected billing errors and overcharges – drains budgets. There’s renewal pressure with stop-loss insurance, marked by unfavorable contract terms, threats of lasers, and premium increases. And employee demands can be expensive to meet, whether it’s affordable quality care or access to the latest treatments.

There are a lot of potential solutions that will go far in relieving the pain. Here are a few to explore with your broker.

“A best-practices framework should span medical necessity criteria for coverage.”

1. Examine Your Pbm Contract

Various PBM management levers can be pulled to lower costs and make contracts smarter, leading to better outcomes. Bolstered by best-in-class client data analytics, these include:

• Do a deep review of the PBM contract’s terms to eliminate hidden price markups, implement pass-through pricing and mandate full transparency. This can yield significant returns, no small benefit as pharmaceutical costs account for over 25 percent of some employer health budgets.

• Evaluate contractual rebate strategies. The idea is to focus on the rebate portion, but also assess the net cost being charged in terms of the contracted rate along with the rebates.

• Conduct a holistic review of formulary management. One aspect to consider is the number of biosimilars hitting the market: What’s the impact of this shift on, for example, pricing for Humira, which historically has been on the formulary?

2. Incentivize Sites Of Care

Another lever to be pulled relates to the site of care. This isn’t about cutting corners but ensuring that high quality care, across multiple services, is delivered in the most costeffective setting.

Take infusion therapy: Hospital outpatient departments may charge up to three times more than an ambulatory center for the exact same treatment. Shifting coverage accordingly can save the plan about 55 percent without compromising safety or clinical outcomes. Similarly, encouraging urgent care visits over avoidable emergency department can reduce claims costs.

Not only must member incentives be part of the implementation (like zero-cost procedure coverage), but quality assurance must be wrapped into the strategy, including alignment of centers with clinical standards and continuous monitoring of performance.

3. Try To Balance The GLP-1 Coverage Issue

Coverage of GLP-1s presents considerations of varying urgency to plan sponsors:

• A decision framework is essential to get at key issues of whether coverage is for diabetes or obesity purposes. Key to this is evaluating the standard of care for diabetes management, as well as with the costs versus outcomes uncertainty for weight management.

• The decision rests on aspects that are not yet quantifiable: specifically, it’s too early to quantify the ROI weight management as evidence is maturing.

• A best-practices framework should span medical necessity criteria for coverage, like BMI and co-morbidities, and also specify step therapy and prior authorization protocols. It’s also important to track progress in both diabetes and obesity management. Utilization tracking should be ongoing.

Quarterly reviews are important as utilization trends develop for both diabetes and obesity treatment with GLP-1s. These also should be the time for budget assessments, with outcomes data collected to provide insights on ROI.