US healthcare is becoming too expensive—and employers are paying the price

The growing US healthcare cost burden on employers

U.S. employers are footing a growing share of the nation’s healthcare bill—and they are running out of ways to absorb the increases. National healthcare expenditures reached $4.9 trillion in 2023, and private businesses funded nearly half of all private insurance spending. Mercer’s 2025 employer cost outlook shows average spending at $17,496 per employee, continuing a multiyear trend of 6-7% annual premium growth. With costs rising faster than wages or productivity, many employers have responded by increasing employee contributions, redesigning benefits, or adopting cost-control strategies. Yet these strategies often create a new problem: employees—facing higher premiums and out-of-pocket burdens—delay care or opt out of coverage altogether and when people delay care, costs skyrocket.

High-cost employees drive the majority of spending

Across actuarial studies, 20-40% of employer healthcare spending comes from a small segment of high-risk or rising-risk employees. Only 5-10% of members drive 50-70% of annual claims, and many of those costs are tied to conditions that were preventable or manageable earlier in the disease cycle. When employees enter the system late—with advanced cancer, uncontrolled diabetes, heart disease, or severe musculoskeletal deterioration—employers pay exponentially more than they would have if the condition had been identified and treated early.

Too many vendors, not enough engagement

Employers have tried to combat this trend by layering on more benefit solutions. PwC reports that one in four employers now works with more than 20 different vendors in an attempt to address physical health, mental health, point solutions, navigation, telehealth, and musculoskeletal support, but despite this effort and the potpourri of solutions, the cost curve continues to rise. The reason is simple: the system is not lacking in vendors—it is lacking in employee engagement, especially in primary care—what was once known as the nucleus of healthcare.

The role of primary care in cost management

Primary care used to be the central hub of U.S. healthcare—the place where families built long-term trusted relationships with providers who understood their history, lifestyle, and health needs. But over time, access to primary care has eroded. Many patients cannot get timely appointments. Many have no established provider at all and for employees in physically demanding or hourly roles—particularly manufacturing, field service, and DOT-regulated jobs—the healthcare system often feels inconvenient, unfamiliar, or unwelcoming.

To use an athletic analogy, primary care is the catcher on the field—the only player who can see everything happening, anticipate risks, guide strategy, and coordinate with the rest of the team. Without a catcher, the entire game breaks down. Without primary care, the healthcare system becomes reactive, expensive, and fragmented.

The World Health Organization notes that strong primary care systems can address 80-90% of a person’s healthcare needs without requiring specialty or hospital services. That means most chronic disease management, preventive screenings, acute visits, mental health support, and coordination of specialty care can—and should—happen in primary care. When this relationship is strong and there is trust, patients are more likely to stay healthy, conditions are detected early, and employers avoid preventable high-cost claims.

Bringing primary care to the workforce

Many employers understand this and are moving toward models that bring primary care closer to the workforce. According to Business Group on Health, 35% of employers now offer onsite or nearsite primary care as part of their advanced primary care strategy. Others offer virtual primary care or hybrid models that combine digital access with in-person visits, but offering primary care to employees is only part of the answer—they still must be engaged.

Conversations with large primary care benefit vendors reveal a consistent pattern: white-collar employees tend to engage readily across all modalities, especially virtual care. But plant-floor workers, field employees, and DOT-regulated workers—often male-dominated roles—engage at far lower rates. These are the same employees who are more likely to delay care, work through pain, or seek medical attention only after symptoms become severe enough to affect their job performance. They are also disproportionately represented in high-cost catastrophic claims.

Designing benefits that employees will use

This gap in engagement reveals an uncomfortable truth: the healthcare strategies employers design are not always the strategies their employees trust, understand, or can realistically use. A one-size-fits-all benefit package fails because a workforce is not a single tree, but a forest. It is a collection of cultures, socioeconomic realities, languages, health literacy levels, life pressures, and work environments.

If employers want meaningful cost reduction, they must understand what healthcare means to their employees—not to a hypothetical employee in a benefits survey. For some employees, trust matters more than convenience. For others, convenience matters more than cost. For some, virtual care feels unfamiliar or impersonal; for others, it is the preferred access point. Some employees may not have the flexibility to leave the production floor for an appointment, while others may lack transportation to off-site clinics. There is an abundance of unique needs within an employer’s population and employers must have an idea about them all. This is not a utilization problem. It is a design problem.

Reorienting employer healthcare strategy

To change the trajectory of employer healthcare spending, employers should reorient their strategy around three questions:

1. Who are our employees, really?
   

   Not as demographics on a spreadsheet, but as people with cultural norms, responsibilities, fears, and preferences that influence how they seek care.
   
   

2. What drives or prevents them from engaging in primary care?
   

   Barriers may include time constraints, stigma, cost concerns, mistrust, past negative experiences, or simple unfamiliarity with how primary care works.
   
   

3. What primary care model meets them where they are?
   

   Onsite clinics may work for manufacturing. Nearsite clinical hubs may work for distributed workforces. Virtual-first models may suit remote employees. Mobile clinics may reach workers in rural or high-travel jobs.

The answer is do not “just add another vendor.” It is always about building a primary care ecosystem employees will use—one that feels accessible, trustworthy, culturally aligned, and relevant to their lives.

Conclusion: returning to the basics

If the United States wants to make meaningful progress in reducing healthcare costs, employers must return to the basics: Know your workforce deeply. Build trust intentionally. Make primary care the catcher on the field again.

When employees engage in primary care—consistently, comfortably, and early—they stay healthier, avoid preventable crises, and reduce high-cost claims. And when that happens, employers finally begin to see healthcare costs move in the right direction.

Leading manufacturer shares results in action

See how one employer reclaimed healthcare value through advanced primary care. In this on-demand webinar, AISIN, a leading manufacturer, shares how they shifted from fragmented healthcare delivery to onsite health centers powered by advanced primary care. 

Hear from AISIN and Marathon Health leaders as they walk through their journey—from early wins to overcoming real-world challenges—and explore how this approach drove measurable ROI, stronger engagement, and better outcomes for employees.