Gut Check: Why GI Conditions Are Skyrocketing in Employer Healthcare Costs

Speaker A: Foreign. Welcome back to Healthcare on the Rocks. Employee Benefits with a twist. I'm, um, Brittany Hardaway, Director of, uh, strategic partnerships at Springbok.

Speaker B: Hi there. I'm Rachel Baumgartner, Senior Manager of Marketing at Springbuck. Today we're excited to be joined by Chris Gagan, Senior Director of Solutions Management at Springbuck. Chris is one of the authors behind the 2025 Employee Health Trends report. He brings deep expertise in healthcare analytics, data driven insights and strategic planning to help employers understand and navigate the biggest costs and health challenges impacting their workforce. His work at Springbok focuses on uncovering the trends driving healthcare spend and translating them into actionable strategies for employers.

Speaker A: Chris, we're so excited to have you here to dive into this year's report.

Speaker C: Well, I'm happy to be here. Thanks for having me. I look forward to chatting about some of the findings in the report.

Speaker A: Awesome. Um, let's start with the big picture. Healthcare costs have continued to rise, and the 2025 Employee Health Trends report highlights some significant increases. Can you walk us through the key cost drivers that shaped healthcare spend in 2024 and beyond?

Speaker C: Indeed, healthcare costs continue to rise. We've seen really large drug spend increases going into 2022 and 2023. And by large I mean like 14% a year for drugs. And so really far and away the top drivers of overall healthcare cost trends for those years. The overall paid trend for the year ending 2023 was about 7.5%. And that's what we saw again in 2024, about 7.5%. And this is for plan paid claims, which is after discounts and after the member cost share. But I'd say in 2024 we saw a more balanced increase between pharmaceutical and medical increases. The drug costs are only, you know, air quote, only up 8%, uh, while medical claims rose 7.3%. We analyzed service classifications to tell us the what are we spending our money on? Which is a little different than the why we spend money, which are kind of like the conditions being treated or where we're spending money, which is describing things like ER or inpatient places of service. But the top three service classification driving trend in 2024 are specialty drugs from the pharmacy channel, surgical procedures on the medical side, and specialty drugs through the medical channel.

Speaker A: So the report mentions that musculoskeletal and gastrointestinal, uh, surgical procedures are key contributors to rising healthcare costs. What's behind these trends and how should employers be thinking about them?

Speaker C: Yeah, so outside of specialty drugs, we thought it was interesting that Surgical procedures were a top driver of medical cost trend. And when we looked deeper into those types of procedures, they were for services that treated MSK and GI conditions. We found that it wasn't more people having these procedures or that these procedures are being done more often, but rather that the procedures themselves are just more expensive. For msk, the leading surgical procedures were for hips and knees, whereas for gi, it was around colonoscopies with polyp removals or biopsies. And employers can generally think of this as good preventive cost. However, additionally, for employers, these cost increases align with inflation. Generally, inflation on health care services lags behind overall inflation, so we can expect to see prices continue to rise. And something employers can explore in this area are surgical centers of excellence or direct contracts. And COEs can be a, they can be kind of like a win win for employers and employees because they're lowering or at least stabilizing and, uh, making it predictable the costs without shifting the cost to employees. If you go down that road, it's just important that COEs should not be determined on price alone, but they should also be able to demonstrate superior outcomes.

Speaker B: All right, Chris, you also dive into gastrointestinal diseases, also known as GI in the report. Why has GI care become one of the top cost drivers? And what should employers be paying attention to in this area?

Speaker C: Yes, as we dig into the why costs are increasing, we found that after cancer and diabetes, GI diseases are the third most costly condition group in terms of spend. And over the last three years, it's second only to diabetes in terms of trend increase. So it's number three in spend, number two in trend. And like you're asking, there's a lot of questions as to why. The short answer to both of your questions is drugs. Specialty drugs are the reason GI has become the top cost driver, and specialty drugs are what employers should be paying attention to in this area. A couple of other things to pay attention to in this area are high cost claimants and correlations with mental health. Two things very front and center for employers today.

Speaker A: When we think about GI conditions, many people might assume that they're relatively minor issues like acid reflux or gerd, but we've seen in the data telling a different story. So what are some of the most expensive GI conditions driving employer healthcare costs today?

Speaker C: Yeah, well, from a prevalence perspective, the people are right. Uh, the top conditions being treated are grouped into something we refer to as inflammation of esophagus. And for the most part, this is made up of conditions like you mentioned, acid reflux, GERD gastric pains, things like that. And these conditions are generally treated by doctor office visits and low cost generic scripts. But when it comes to cost, however, it's all about inflammatory bowel disease, also known as ibd. And this includes Crohn's disease and ulcerative colitis. It makes up about half of all GI spend and trend. Some other conditions though that bubble up to the top within this broader category of gastrointestinal diseases are hemorrhoids, hernias and irritable bowel syndrome, also known as ibs. And I just want to take a minute on IBS because it's often confused with ibd, you know, just one letter off or it's sometimes grouped in there with it, but it's very different. IBD is a disease diagnosed with medical tests where IBS is a syndrome diagnosed based on symptoms. And these symptoms are things like chronic abdominal pain, bowel habits, alternating between constipation and diarrhea, gassiness and or nausea. And IBS does not cause inflammation or physical damage to the digestive tract, but it does cause a great deal of discomfort and often has a significant impact on a person's quality of life. The cause for IBS is not fully understood, but it is a stress sensitive disorder where stress of the unknown, anxiety and depression have all shown to exacerbate symptoms or trigger a stress response. But from a cost perspective, it's all about ibd.

Speaker B: So diving into that deeper what's driving the cost increase for IBD and what are some of the challenges employers face in managing that condition? Mhm.

Speaker C: IBD is a serious and expensive disease. It's the number one cost driver in the category and it makes up about half of the spend in this category. And of that specialty drugs make up nearly 80% of the spend on IBD. This includes both medical channel and pharmacy channel specialty drugs. However, the spend in the pharmacy channel is about three times the medical channel. And the pharmacy channel is also up 35% over the last three years compared to the medical channel which is roughly flat over that same time period. So it's clear here that the IBD trend is driven by specialty drugs, especially from the pharmacy channel. And this is a challenging condition to manage for employers. To your other question, uh, but there are solutions out there. For example, there are a number of biosimilars out now and scheduled to come out. But on the other hand of that some newer drugs have come out and have been heavily marketed, offsetting that biosimilar savings. And it's also challenging. I would Say for some employers to get the total picture of the condition. If you're looking at medical and pharmacy channel drugs separately without the ability to analyze them together to get a complete picture of the disease impact. And this condition is also associated with leads from work, so if you can fold in that data too, it's even better.

Speaker A: That's an awesome perspective as we dive more into the GI related pharmaceutical spend, especially the specialty drug space. What are the most commonly prescribed drugs for GI conditions and how are they affecting overall healthcare trends?

Speaker C: Yes, as I mentioned, specialty drugs, especially from the pharmacy channel, are driving the cost for ibd and IBD is driving the cost of all gi. The top five drugs, I would say what we're talking about here are Stelara, Skyrizi, Humira, Rinvoq and Remicade. And did you know a patient taking Stelara to manage IBD will cost upwards of $125,000 a year in terms of trend? Stelara, Skyrizi and Rinvoq, those three are all having the largest impact on the trend. And although Humira and Remicade are very expensive, they're actually offsetting trend increases thanks to the biosimilars in the market. One other drug that is driving trend in GI costs is actually not related to IBD at all. Earlier we talked about how inflammation of esophagus is a category that's generally high prevalence and low cost. However, there's this chronic immune system disease called eosinophilic phagitis, uh, AKA E O, E. And I'm glad they do that because I can't say that again. But with this disease, certain white blood cells build up in the esophagus and can damage the tissue, making it difficult to swallow. And for children it can lead to poor growth and failure to thrive. In 2022, Dupixent as a drug was approved to treat this condition in children age 12 plus, uh, and in 2024 it was approved to treat children ages 1 through 11. And since its approval, claimants taking Dupixent for this condition tripled and their cost per claimant is just under $24,000 per year. So even though the condition is relatively uncommon, the increase in the utilization is making an impact on overall healthcare trend.

Speaker B: Those stats are definitely something to look deeper into. One more fascinating insight from this report is the connection between GI health and mental health. What does this data reveal about this relationship? And how should employers be thinking about holistic care strategies?

Speaker C: I agree. This, uh, was one of my favorite insights as well. We know there are connections between the gut and the brain and we wanted to explore the data and see if we could understand the associated risks between GI and mental health. So what we did is we looked at adult members with anxiety or depression or behavioral health conditions such as like add, autism, things like that, and we looked at them independently as well as all combinations of those conditions. Additionally, we also looked at adult members that did not have any of those conditions. And what we found is that people with these mental health conditions were roughly twice as likely to have GI conditions in general. We also looked at specific GI conditions and found that ibs, irritable bowel syndrome had the highest correlation with mental health and the highest risk ratio we identified was in those members that had anxiety or depression. They were three and a half times more likely to have IBS than those adults that do not have anxiety or depression. And this is significant because to your second question, employers that focus on wellness and stress management are, uh, not only helping members with mental health conditions, but managing those mental health conditions can help those suffering from GI conditions by mitigating stress induced GI flare ups. This leads to better management of both conditions and overall improvement in quality of life, including less time off work.

Speaker A: With GI conditions being such a major cost driver, what strategies could employers prioritize to help reduce the financial burden while still supporting employees who need care?

Speaker C: I do think focusing on mental health will support these employees and can help reduce financial risk. Employers can partner with vendors that can assist with managing members with complex needs or GI specifically. In fact, Springbok just had a webinar with Cylinder and Lifespeak to talk about this exact issue and the strategies used to support it. Additionally, I would recommend staying ahead of the biosimilar education and switch when possible, especially with newly diagnosed patients getting them started on biosimilars from the beginning and even with those patients that are using biosimilars in the medical channel, make sure they're doing it in the most cost effective setting which is not an outpatient hospital. And then finally, keep in mind that members with IBD or EOE are likely to meet out of pocket limits. So consider plan design options that will help support the member's medication adherence.

Speaker A: Those are great points. So our approach here at Springbok is all about using data driven insights to help employers make proactive strategic decisions. How can employers or organizations in general leverage those insights to anticipate future health risks and cost trends?

Speaker C: I love this question. And first, it's important to be able to look at all claims for these members like I mentioned before both medical and pharmacy together in that siloed that's important to get the most useful insights and yes, Springbok does that. Within our application we've curated over 100 insights that are updated monthly and there are a number of these insights that can be leveraged to help offset the growing cost trends of gi. We surface members that are on specific drugs that have biosimilar opportunities for both medical and pharmacy channels like Humira, Stelara, uh, Remicade, some of those expensive drugs we've mentioned in this disease category or identify members and the cost savings associated from switching gastric reflux, add depression or anxiety brand name drugs to generics. And another example is automatically surfacing members that are newly identified to these conditions that have high specialty drug costs. So these insights are extra valuable because they identify members that might not be on the drugs yet, so they can be targeted for communication or getting them started on biosimilars from the get go kind of like we mentioned earlier. And it's also useful to identify members that would qualify for a point solution and in the Springbuck Activate marketplace we do that for this condition. Specifically we identify members and an employer's specific population and show what kind of savings are achievable by implementing a uh, respective solution. And so a lot of data driven insights in the application to help employers make strategic decisions.

Speaker B: Chris, if you had one highlight to take away from the whole 2025 Employee Health Trends report that every employer should know, what would you say that is?

Speaker C: That's a tough question because there are a lot of good nuggets in the report, some of which we discussed today. But to me the the main theme this past year is specialty drugs and in 10, 25 years, whatever it is, when we look back I think the thing that really stands out, it will be interesting to measure is the lesson learned from the Humira biosimilar adoption in 2024. So you know, biosimilars are the silver lining to the increasing cost pressure of specialty drugs. But every silver lining has a touch of gray, so they say and low adoption rates are holding back the savings opportunities. The specific learning from Humira highlighted in the report was that the biosimilar adoption rate tripled after it was incentivized by preferring the biosimilar over the originator drug and by reducing co pays. So incentivizing their use through formulary and plan design is important for realizing their savings potential and combating the future cost increases.

Speaker B: Chris, all this information was so amazing to hear. Thank you for sharing your wealth of knowledge with us. And thank you for joining us and, uh, sharing your valuable insights from 2025 Health Trends Report for Springbok.

Speaker C: Thank you for having me.

Speaker A: Yes, Chris, it was definitely a pleasure for our listeners. If you've enjoyed today's conversation, don't forget to subscribe. And stay tuned for more episodes where we break down the latest trends in employee benefits and health intelligence. Until next time, stay healthy and stay informed.