A healthy workforce delivers greater productivity but the annual inflation of medical costs and claims has escalated in recent years…

Nobody would dispute that a happy and healthy workforce delivers greater productivity and corporate success. Indeed, one study(1) estimates health-related lost productivity costs the UK economy alone £77.5 billion annually. Separate findings from Mercer’s ‘Why Good Health is Good Business’ paper(2) found the physical and mental wellbeing of staff has one of the largest impacts on the people-related costs of a business.

However, annual inflation of medical costs and claims has escalated in recent years: the global medical rate is 8.4% while the average general inflation rate is 3.1% in 2018(3). In some regions and markets such as Middle East & Africa and Latin America & Caribbean, annual medical trend rates are even higher at 15.3% and 13.9% respectively.

“…multinational companies cannot simply continue to passively, and indefinitely, bear these increasing costs.”
Recent research commissioned by MAXIS GBN(4) reinforces the need to focus on solutions that reduce employee benefits cost inflation over the coming years. More than two thirds (70%) of the employee benefits professionals surveyed stated monitoring employee wellness was an area of concern. Nearly two thirds (63%) were worried specifically about the increase in mental health claims as employers become more aware of the impact of stress and depression.

Clearly, we all need to do something…

And so, it becomes clear, multinational companies cannot simply continue to bear these increasing costs passively and indefinitely.

Indeed, while many are exploring solutions to reduce costs, many others are actively exploring solutions that can help minimise claims volumes through proactive and preventative schemes: ones that aim to improve the overall health and lifestyles of employees and avoid health issues in the first place.

‘Wellness solution’ is an increasingly overused and broad term. Wellness programmes cover a huge range of activities designed to encourage good health outcomes for employees, whether those are mental, physical or financial. Programmes can include everything from biometric screening to health coaching, from offering access to an employee assistance programme to investing in on-site fitness facilities and even sponsored smoking cessation programmes. More recently, some of the larger firms are trialling wearable technologies such as smartwatches to track fitness activity in return for financial incentives, in spite of the associated ‘big brother’ style data issues.

“On a purely financial basis, proactive interventions and education are seen to deliver a greater return on investment than reactive treatments…”

“A well-designed wellness programme... can educate and is also likely to have a positive effect on employee engagement as well.”

Prevention rather than cure

At MAXIS, we’ve been gathering medical claims data for four years and are able to use this aggregated global data to help multinationals address soaring healthcare costs through preventative and educational programmes. The data informs multinational companies about the specific medical conditions driving their costs; this is then monitored every year and benchmarked against other companies within the same market.

Some of the fascinating facts we’ve discovered include:

  • some markets have limited or no options to obtain a second medical opinion and yet this is known to increase the likelihood of preventable surgeries
  • in many countries mental health is a largely ignored condition surrounded by social stigma
  • non-cardiac chest pains and stress manifestations are often assigned as “symptoms and signs not classified anywhere”, increasing the costs associated with expensive diagnostic testing
  • the top cost drivers in markets with outpatient services are specialist consultations, resulting in increased pharmacy costs and referrals for laboratory work/radiology
  • globally, there is poor chronic disease management programs in place – current initiatives rarely go beyond annual health fairs or weekly newsletters.

For many multinationals, the question has become, when you have this data, what do you do about solving these issues - trying to prevent unnecessary claims in the future and keep your costs from increasing even further?

A comprehensive global wellness programme is a very good way to start. Not only will it bring consistency to the way employees access services it can offer more control over how medical procedures are authorised. A welldesigned  wellness programme, which includes options for employees to tailor an approach
based on their personal requirements and life stages, can educate and is also likely to have a positive effect on employee engagement.

As an employer you can also use your health data analytics to think about specifically where you need to provide the most education and offer the most help through new online or in-person services. Identifying and tackling specific issues, while being able to calculate the likely outcome of your activity, should help you provide the most appropriate programmes and keep your costs from soaring further each year.

To find out whether MAXIS Global Wellness would be a good match for your business, please visit here.

3 IMF World Economic Outlook Database April 2017
4 MAXIS GBN conducted research with 216 employee benefits professionals between 20th and 31st January 2018. The research was undertaken online by an independent third party.