In the past few years there has been a change in the paradigm of healthcare coverage in the Middle East. Working towards keeping employees in good health rather than paying the price of sickness, employers are currently recognising the return on investment of having a healthy workforce.
A recent survey conducted by Towers Watson revealed how recent changes in healthcare legislation can be expected to affect employers and their health related benefits trends in the region. This is driven by the enforcement of healthcare systems across the region that links visa renewal or issuance to mandatory health insurance so that resident expatriates have access to essential health services at all times.
The survey showed that most of the employers believe there is a connection between the provision of healthcare benefits and engagement, productivity and absenteeism. While half of the responding organisations admit the absence of a strategy to encourage healthy behaviours, almost three-quarters plan to have one over the next three years. This suggests that, going forward, organisations in the region are realising the value they can reap from a healthy workforce and consequently understand the role of health and wellness strategies in their employee value proposition.
Regional healthcare concerns
The top lifestyle risk factors of the Middle Eastern workforce identified in the survey are stress, lack of physical activity, tobacco use, weight and nutrition problems. Stress is potentially a hidden issue of the region, since until now it has not been widely acknowledged as a serious issue for employers. This may be partly because employees are reluctant to formally report feeling under pressure, and also partly because stress is rarely in itself categorised as a cause of medical claims.
The main factors causing stress in the workplace were considered to be the erosion of work/life balance, especially with technologies that require employees to be available after working hours, together with unclear or conflicting job expectations and inadequate staffing.
Therefore, it is important for companies to have prevention and early detection programmes in place, as well as promoting a healthy work environment to identify and mitigate stress factors. Alongside the focus on lifestyle change and health management, a noticeable growth in wellness screening programmes is also expected, as some companies still do not have a strategy in implementing these programmes.
By focusing on prevention rather than treatment, employers can not only control healthcare costs, but they can also increase employee productivity. From the point of view of the employee, the development of health and wellness programmes supports their sense of wellbeing and engagement with their employer. Particularly important are programmes designed specifically to tackle some conditions that are excluded from coverage (such as programmes that help manage chronic conditions) or those that focus on prevention of risk factors, since it can help them to avoid at least part of the costs they have to face.
Companies to look after their employees’ wellbeing
Many companies in the Middle East already go beyond what is required by the law and provide employees with comprehensive health insurance, with more than three quarters of companies providing additional health management offerings such as health screenings, health education and coaching, as well as preventative programmes.
Popular benefits that are often included in employees’ health insurance policies cover areas such as specialist consultations and tests, surgery and hospitalisation and chronic and serious illness. Maternity, dental and pharmacy benefits are also popular with employees.
One of the key findings in the study is the high rates of medical inflation in the region, being at least two to three times salary inflation. This will mean that employers, who will be mandated to fund health insurance to all their employees – and in some cases their dependents too – will look to manage and control their exposure to future cost increases in order to ensure the benefit is sustainable.
Not surprisingly, therefore, only a small percentage of respondents showed intention to take measures that may increase their cost. However some were considering including, for instance, maternity benefits where they are not included or extending coverage to the parents of employees or simply just increasing their benefits. Most employers were more focused on cost containment.
Co-payment and co-insurance are two features already present in many healthcare policies. Other approaches include financial caps, restricting provider networks and sharing premium costs with employees where this is allowed by the law.
Restricting cover and shifting costs to employees will ultimately de-value what is currently a highly valued employee benefit and hence it is not an attractive strategy in the longer term.
A more sustainable approach which has been highlighted in the region is to work towards the development of a culture of health and wellbeing within organisations. Supported by appropriate programmes for employees, this is a strategy that focuses on prevention rather than treatment to manage employee health risks.
By supporting employees to be more accountable for their own health, employers can develop a strategy of healthcare cost control aimed at guaranteeing the sustainability of pricing in regards to medical plans, but in so doing also increase employee productivity and wellbeing, making it a win-win for both.
Credits: Steve Clements
Date: September 2015