Vytalize Health CEO Faris Ghawi

Population Health

Employers Feeling the Healthcare Pressure

Employers are among digital health’s most important customer bases, and the Business Group on Health’s annual survey is one of the best ways to get a pulse on their healthcare priorities.

Some stats that caught the eye:

• Employers expect healthcare costs to spike 8% in 2025 – the highest jump in a decade.
• Pharmacy has risen from 21% to 27% of employer healthcare spend from 2021 to 2023.
• Cancer, MSK, and cardiovascular conditions are the top three cost drivers.
• 80% of employers feel pressure for new mental health, obesity, and cancer treatments.

The above chart shows the accelerating climb in employer healthcare costs since 2019, with most of the 28% increase looking like it was absorbed by employer contributions to premiums. 

• Cancer was the most commonly cited cost driver in 2024, and 72% of employers noted a higher prevalence of the disease among their workers and their families.

• While some of that can be attributed to delayed care and screenings during the pandemic, it’s also perpetuated by an “alarming” rise of diagnoses in younger people.

GLP-1s, gene therapies, and specialty drugs were another major culprit behind the cost pressure, and over half of employers specifically called out the impact of GLP-1s.

• Nearly all employers cover GLP-1s for diabetes, compared to 67% for obesity and 34% for cardiology (although it appears that cardiology’s share could double by 2027).

• GLP-1s are undoubtedly promising medications, yet 96% of employers worry about their long-term cost implications, and 52% would strongly consider reducing their coverage to better control healthcare expenses.

To reign in costs, employers are actively reevaluating their vendor partnerships, and plan to use upcoming RFPs to negotiate better terms and end relationships with underperformers.

• Six in 10 employers are looking to cut back on the number of vendors they work with, and underutilized solutions will be the first ones on the chopping block.

• Vendor management is at the center of employers’ cost containment strategies, and they’re aiming to integrate benefits to eliminate expenses and simplify the member experience.

The Takeaway

Employers are clearly feeling the pressure to get costs under control, but the areas where they need the most help – obesity care, behavioral health, MSK – are also brimming with digital health startups promising that their solution is the answer. That begs the question: if these tools are actually working, why are costs only continuing to climb faster?

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The Wire

• Inc. 5000 Highfliers: What’s the fastest growing private company in the U.S.? Value-based care enabler Vytalize Health, which the latest Inc. 5000 list just clocked at 90,779% revenue growth over the last three years. Vytalize has been quietly crushing it since we covered their $100M Series C last July, and this exposé did a great job highlighting how tiny changes have been reaping enormous results at both the startup and its ACO partners. 

• LetsGetChecked Acquires Truepill: Home testing company LetsGetChecked is acquiring pharmacy fulfillment platform Truepill for $525M… sort of. Both sides of the Optum-backed duo are burning through funds, and the acquisition is structured with just $25M up front, $200M tied to revenue milestones, and another $150M via a convertible note offering. The idea is that merging two shaky companies will allow  the combined operation to emerge on more stable footing. 

• EHRs and Nurse Burnout: About a third of nurses experiencing burnout last year reported that their EHR was a contributor, according to a KLAS survey of 75k nurses. Of those that said their EHR was harming job satisfaction, 40% are likely to leave their organization within the next two years. Adding to the frustration was the fact that most nurses don’t think they have a say in EHR governance at their org, with 65% disagreeing that they can impact EHR-related decisions, and 39% saying they don’t feel they can ask for fixes.

• Slingshot AI Raises $20M: Slingshot AI locked in $30M at a $225M valuation through a growth round led by a16z. Business Insider reported that the raise was quickly followed by another bolt-on investment from Menlo Ventures to add more fuel behind Slingshot’s behavioral health-focused LLMs and AI therapist solutions. It’s a great time to be a startup going after all the right buzzwords.

• Pear is Back on the Menu: Defunct DTx pioneer Pear Therapeutics is seeing its apps get a new lease on life after virtual addiction treatment startup PursueCare recently began offering them to its patients. PursueCare bought Pear’s reSET and reSET-O digital therapeutics for substance use disorder as the company was going bankrupt, and hopes that using the apps to complement its care plans will provide a better path to success than marketing them as standalone treatments.

• Judging Patients for Misinformation: New research in Medical Decision Making shows that patients are right to worry about their doctors judging them for believing medical misinformation. After 207 primary care physicians read vignettes of patients with type 2 diabetes sharing their health beliefs, perception surveys revealed the PCPs viewed patients negatively if they held mistaken beliefs, especially if the belief was “unreasonable” or “conspiratorial.” Patients were viewed even more harshly if they shared incorrect statements central to their diabetes management.

• Dr. Google Will HeAR You Now: Google introduced its HeAR bioacoustic AI foundation model that analyzes human sounds like coughs to detect potential health issues. HeAR was trained on over 300M audio clips to accurately discern health-related signals from short sound bites, and is already being used to enhance Salcit Technologies’ Swaasa platform for detecting tuberculosis in resource-limited areas. Down the road, Google expects HeAR to expand beyond TB to use cases such as monitoring COPD and other respiratory conditions.

• Home HF Test Breakthrough: Colorado State researchers are developing a quick, portable, and low-cost saliva test that might expand access to home heart failure screening. The electrochemical biosensor test measures Galectin-3 and S100A7 biomarkers, revealing signs of heart failure in 15 minutes, and carrying a production cost of just $3. This combination of advantages could make regular home HF testing possible.

• UChicago + Loyal: UChicago is partnering with Loyal to meet its growing demand for consumer-centric ways to find and book care. Loyal will manage UChicago’s provider and location information to ensure patients can easily access the information they need, with the collaboration arriving right on the heels of the patient engagement startup’s $33.5M Series B that was earmarked for expanding into new health systems.

• Walgreens Making Moves: Walgreens landed a $100M BARDA partnership to help the U.S. government expand its decentralized clinical trial capabilities. Although the pharmacy giant has been struggling with its retail healthcare ambitions, it’s bringing on a pair of seasoned industry veterans to overhaul its customer experience, both in-store and online. Tracey Koller is coming aboard as Walgreens’ new chief merchandising officer, while Sharmila Sudhakar is taking over as its head of digital commerce.

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