The A-B-C of Employee Healthcare in India
Factors that have negatively impacted employers' health care costs are cost variants across geographical locations and other health risks
Since it is that time of the year when most of us file the year’s medical bills as investment proofs, I decided to reflect on how the company benefits from them. As I dug deeper, I understood that medical bills are just the tip of the iceberg; most companies today offer a lot more than basic health care and hospitalization coverage under the umbrella of health and wellness. These include group health and life insurances, stress and resilience management, wellness campaigns, and smoking cessation programmes.
A Towers Watson report on Health & Productivity in India revealed that health care costs have risen dramatically over the last decade. Though it is interesting to note that the highest growth rate was seen in 2006 (22%) and it has come down considerably in 2012 (expected 13%). This dip can be attributed primarily to the financial crisis that slumped economies worldwide in the interim. Due to this economic slowdown, most companies began to closely review health insurance plans and benefit packages being offered. A recent report published by Marsh India, a subsidiary of Marsh, the global leader in insurance broking and risk management, states that employers' medical plan costs have increased at a faster rate than their salary-related expenditure over the last five years. The key factors that have negatively impacted employers’ health care costs are medical inflation, room rent, cost variants across geographical locations and other health risks.
In order to balance the health quotient with the rewards profile of the workforce, the policymakers of an organization need to follow a three tier approach to employee health and wellness: Assess-Balance-Communicate. And this is what we call the A-B-C of employee healthcare in India.
As per the Towers Watson report, employers in India rely primarily on claims data to understand what ails their workforce. This is essentially hospitalization information and hence chronic conditions treated on an outpatient basis often go unnoticed.
In order to assess the productivity consequence of workforce health and identify the health conditions that impact the bottom-line results, companies should look at a comprehensive risk assessment of employee health. Measuring absenteeism, impact of healthcare campaigns, increase in employee engagement through such initiatives and the change in productivity numbers are some key aspects of this kind of assessment. Atanu Mitra of Quest Diagnostics suggests that companies can focus on measuring what they want to improve specifically. For instance, an improvement in organization’s health risk score is a simple, directed metric which can be used to see the ROI of a health check-up plan.
What most companies forget to balance while implementing their health and wellness initiatives, is the retentive value with the health quotient. The Towers Watson report also mentions that in practice, programs are geared mostly toward attraction and retention, suggesting that priorities may not currently align with what is being implemented.
Companies need to maintain a sound balance between addressing employee wellbeing and employee engagement while devising healthcare plans. The central idea of an employee health and wellness plan is to improve the emotional and social health of employees. Incorporating workforce wellbeing and work-life balance for attraction and retention along with increasing awareness about health, should be the cornerstones of employee healthcare plans.
Educating the employee about how to make the best of the healthcare initiatives is one of the most important parts of the health and wellness programs. Hence, cogent communication is crucial to the programme. Reports suggest that 59% of employers provide regular communication that encourages employee safety and well-being, at the same time though, it is important to gauge the impact of the same.
Because this is a new concept for employers in India, it’s not surprising that employers currently prefer simpler strategies that have a quick, visible impact to more complex ones. But more complex solutions can have a far-reaching positive impact, making this an area of opportunity for employers. Hence, more programs with mass-reach need to be organized by companies.
The gamut of employee healthcare is much larger than just the A-B-C’s mentioned above, but it is clear that the challenge for employers today is beyond cost management, considering the implications of how this might impact productivity, employee engagement and the organization’s potential to attract and retain top talent.