Rising healthcare costs now outrank talent retention as the leading strategic concern for U.S. hospitals, according to Aon’s latest Benefits Survey of Hospitals. The study covers 155 health systems and more than 1,500 hospitals, representing about 3.6 mn employees, and it captures a sector stretched thin by inflation, chronic disease, and expensive therapies that keep blowing through budgets.
Cost pressure dominates the conversation.
About 93% of health systems rank cost management as their top issue. Median per-employee-per-year spend rose 9.2% over the past year. CFOs notice numbers like that immediately.
Hospitals have adjusted benefit programs in response, but a familiar problem keeps surfacing. Employees often don’t understand the benefits they receive. Only 14% of employers believe their workforce understands the full value of the total rewards package, down from 25% a year earlier. According to Beinsure analysts, when that gap opens, cost controls lose credibility fast.
Sheena Singh, who leads Aon’s national healthcare industry practice, said hospitals need to explain benefits more clearly, not just manage expenses. She argues organizations must connect spending to real value or engagement evaporates. Money leaves. Meaning doesn’t follow. That frustration shows up everywhere.
Affordability strategies keep expanding. Hospitals lean more on salary-based contributions, employer-paid supplemental benefits, and direct financial support for lower-wage workers.
At the same time, systems try to shape benefits that actually fit a multigenerational, diverse workforce. Clean solutions don’t exist. Avoidance isn’t an option.
Pharmacy spending remains the sharpest edge. GLP-1 drugs for diabetes and weight loss now account for half of the top 10 drugs by spend. Health systems respond with exclusions, tighter clinical rules, and restrictive formularies.
Biosimilars are starting to ease costs for older drugs, but progress moves slowly. Some executives describe pharmacy as the harshest part of the curve. Hard to argue.
Plan design keeps shifting. Nearly three quarters of hospital health plans now use three-tier structures, separating domestic, in-network, and out-of-network care.
63% of systems offer high-deductible health plans, even though enrollment trails expectations. As hiring spreads geographically, roughly one-third of systems now offer separate plans for employees working far outside local service areas.
Domestic steerage stays central. Hospitals direct care toward their own facilities, physicians, and pharmacies to tighten coordination and keep spending under control. It’s operational. It’s financial. It works, until it doesn’t.
Wellbeing and ancillary benefits continue to grow. Family-building support, paid parental leave, expanded mental health access, and financial incentives tied to wellbeing programs appear more often. Half of surveyed systems now offer direct incentives for wellbeing engagement. Demand drives that. Employers respond.
Over the past 20 years, hospital benefits have changed almost beyond recognition.
PEPY costs more than doubled. Self-insurance became standard. High-deductible plans, once viewed as risky for hospitals, now appear at nearly two thirds of systems.
Singh said hospitals adapted because they had no alternative as costs rose, workforce expectations shifted, and rules kept changing. The pace still surprises people inside the industry.
We think the message behind this year’s survey comes through clearly. Cost pressure keeps rising, and hospital benefits change whether organizations feel ready or not.
