The 3% Problem: Why Cutting GLP-1s Won't Save Your Healthcare Budget
Episode Summary
As employers face rising health insurance costs—6 to 9%increases on average, double digits for smaller companies—CFOs and benefitsleaders are scanning their budgets for cuts. One line item keeps standing out:GLP-1 spending on weight loss and diabetes drugs like Wegovy, Ozempic, andMounjaro.
The natural question: "What if we just cut these drugsto get our budget back on track?"
But here's what might surprise you: GLP-1 drugs account foronly 3% of total healthcare spending.
In this episode of Healthcare Rebuilt, host Boe Hartman sitsdown with Dr. Rani Aravamudhan, Vice President of Analytic Consulting andMedical Director at Artemis, who analyzed millions of healthcare claims tounderstand what's really driving skyrocketing costs. While GLP-1 spend rose124% in two years, Dr. Aravamudhan reveals the real culprits: outpatient visitsup 33.7%, professional services up 27.9%, and emergency room visits up 34.3%.
The conversation challenges theimpulse to simply cut GLP-1 coverage and instead advocates for a more holisticapproach. Dr. Aravamudhan explains that dropping coverage might save money inthe short term but could lead to significantly higher long-term costs fromdiabetes complications, heart disease, and kidney disease. The real issue isn'tGLP-1s; it's employers' lack of cost visibility and control across all carecategories.
Meet the Guest
Dr. Rani Aravamudhan
VP, Analytic Consulting & Medical Director | Artemis byNomi Health
Dr. Rani Aravamudhan leadsanalytic consulting and serves as Medical Director at Artemis, where she helpsemployers understand their healthcare spending through data analytics. She andher team analyze millions of healthcare claims to identify cost drivers andhelp decision-makers move beyond assumptions to data-driven strategies. Dr.Aravamudhan combines clinical expertise with analytics to help employers seethe full picture of their healthcare spending, from pharmacy costs to medicalclaims, and make informed decisions about coverage and care.
Key Takeaways
"What if that's the wrong question to beasking?" Instead of asking "Can we afford to coverGLP-1s?" employers should be asking "Can we afford not to coverthem?" given the long-term costs of untreated diabetes and obesity.
GLP-1s are only 3% of total healthcare spending.While GLP-1 spend rose 124% in two years, it represents roughly 3% of totalmedical and pharmacy spend. The real cost drivers are outpatient visits,professional services, and emergency room costs.
"It's not just the diabetes or heart disease thatneeds to be tackled.” Dr. Aravamudhan emphasizes that employers need tolook at holistic health outcomes, not just individual drug costs or claims inisolation.
Cutting coverage today could cost you more tomorrow. DroppingGLP-1 coverage might provide short-term savings but risks significantly higherlong-term medical spending from diabetes complications, cardiovascular events,and kidney disease.
Prior authorizations can ensure appropriate use.Rather than eliminating coverage entirely, employers can use priorauthorization criteria to ensure GLP-1s go to patients who will benefitmost—those with diabetes, pre-diabetes, or obesity with comorbidities.
Data transparency is thereal lever. The bigger issue is that employers lack claims-level datato see if GLP-1 use is offsetting future medical events. Direct contractingplus real-time analytics give employers actual control over spending.
In This Episode
· Why 2026 health insurance renewals are showing6-9% increases (or higher for smaller companies).
· What Artemis's analysis of millions of claimsrevealed about GLP-1 spending.
· The real cost drivers: outpatient, professionalservices, and ER visit increases.
· Why GLP-1s represent only 3% of total healthcarespend.
· Long-term health benefits of GLP-1 medicationsbeyond weight loss.
· How cutting GLP-1 coverage today could lead tohigher costs tomorrow.
· The role of prior authorization in managingappropriate GLP-1 use.
· Why employers are "buying blind"without complete claims data.
· How direct-to-provider contracting and real-timeanalytics change the game.
· Practical actions employers can take right nowto get ahead of rising costs.
· Dr. Aravamudhan's optimism for employersnavigating healthcare cost pressures.
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Have questions about your healthcare costs? Contact Nomi Health to learn more about direct networks, real-time paymentsystems, and analytics that show you where your money goes.
