Reimagining Healthcare Cost Containment: Strategies for Employers in 2025

By Ed Liebowitz, Chief Strategy Officer at Solera Health

The healthcare landscape has shifted dramatically – employers are navigating rising costs, an evolving market dynamic and the increasing demand for specialized care. With healthcare costs projected to rise by nearly 8% in 2025 – a 50% increase from 2017 – traditional approaches to managing expenses are no longer enough. Employers must rethink their strategies and embrace a more flexible, integrated approach to contain costs without sacrificing quality or access to care.

The New Cost Drivers: Chronic Conditions and Specialty Medications

Cancer, cardiovascular diseases and musculoskeletal issues remain the top drivers of healthcare costs, but the growing prevalence of obesity and chronic disease treatments has introduced a new layer of complexity. GLP-1 medications, used to manage obesity and diabetes, are a prime example of how high-cost pharmaceuticals are reshaping the cost equation. According to the 2025 Employer Health Care Strategy Survey, pharmacy costs now represent 27% of overall healthcare spend, up from 21% just two years ago.

Employers face the challenge of managing these skyrocketing costs while continuing to provide comprehensive benefits. This is where innovative strategies come into play.

Beyond Traditional Cost Containment: A Shift Toward Flexibility and Integration

The healthcare ecosystem is fragmented and inefficient, with siloed solutions that fail to address the full spectrum of consumer needs. Many of today’s offerings are episodic, focusing on individual conditions rather than the holistic healthcare needs of employees. As a result, employers are stuck managing multiple vendors, with no cohesive approach to care delivery or cost management.

To effectively bend the cost curve, employers must move beyond one-size-fits-all solutions. By adopting integrated digital health tools, employers can streamline care delivery, reduce inefficiencies and enhance the overall healthcare experience for their employees.

Key Strategies to Reduce Healthcare Costs in 2025

• Leverage Vendor Relationships to Drive Value

Cost containment is no longer just about cutting benefits – it's about maximizing value from every dollar spent.  Employers should push vendors to take accountability for their outcomes – shifting them to pay-for-performance relationships and demanding the transparency that shows what is working at the individual level.

• Reevaluate High-Cost Medications

As specialty drugs like GLP-1 medications continue to drive up costs, employers need to take a hard look at coverage policies. While these medications provide significant benefits for treating chronic conditions, the financial strain they place on healthcare budgets cannot be ignored. Employers can leverage an integrated care model to better address the needs of employes on specialty pharmacy. Rather than outsource the spectrum of care to just one vendor, use digital delivery systems so that each individual gets the care they need at a minimized cost structure.

• Embrace High-Performance Networks and Centers of Excellence (COE)

Implementing high-performance networks or requiring the use of centers of excellence can significantly improve care coordination and reduce costs. These models ensure that employees receive care from top providers who consistently deliver better outcomes at lower costs. Employers can also mitigate the inefficiencies caused by fragmented care delivery by promoting integrated care solutions. Be careful not to assume COEs are only in the surgical space – creating networks of low-cost centers of care for preventative through surgical solutions including the digital space can help contain cost.

• Invest in Preventive Care and Early Detection

The cost of treating advanced diseases like cancer is far higher than the cost of early detection and prevention. Employers should invest in comprehensive cancer screening programs and preventive health initiatives that promote early detection. By encouraging employees to engage in proactive health management, employers can reduce the long-term costs associated with chronic disease treatment.

The Future of Employer-Sponsored Healthcare: Flexibility, Transparency and Personalization

Looking ahead, the old way of managing healthcare costs – focusing on short-term fixes and individual benefits adjustments – will not suffice. Employers need a more dynamic approach that addresses the root causes of rising costs, such as poor care coordination, lack of transparency and inefficiencies in the healthcare system.

The future of healthcare is personalized, integrated and transparent. Employers should embrace digital health tools that offer personalized care pathways, ensuring that employees get the right care at the right time. Additionally, enhancing transparency across the care continuum will empower employees to make informed decisions about their healthcare, ultimately driving better outcomes and lower costs.

The Path Forward

As healthcare costs continue to rise, employers are under pressure to rethink their strategies. By embracing a more flexible, integrated approach to healthcare, leveraging vendor partnerships and focusing on prevention, employers can control costs while maintaining the quality of care their employees expect. The time to act is now – those who innovate will not only reduce costs but also improve the overall healthcare experience for their workforce.