Multinationals slow to implement global health and productivity strategies

May 31 2006 by Brian Amble Print This Article

Spiralling healthcare costs have encouraged two-thirds of multinational companies to develop health and productivity strategies for their operations in the United States. But they have been far quick to do the same in other regions of the world.

But as a new survey by consultants Watson Wyatt Worldwide has found, as health care costs rise around the globe, multinationals are increasingly putting such programmes in place in other locations worldwide.

Watson Wyatt's survey of 90 multinational companies found that two-thirds currently have a strategy to improve the health and productivity of their workers in the U.S. but significantly fewer have programs in Canada (22 per cent), Asia-Pacific (21 per cent), Europe (16 per cent) or Latin America (15 per cent).

And although many of these multinationals plan to develop a health and productivity strategy in these regions over the next two years, they will still lag behind their U.S. operations by a wide margin.

"Multinationals have used health and productivity strategies in the United States to help combat the enormous burdens of rising health care costs," said Bob Wesselkamper, director of international consulting at Watson Wyatt.

"Outside the United States, multinationals have been somewhat insulated from increasing health care costs, but they may find that things are changing.

"As many countries consider reducing state-funded health benefits, multinationals will find that well-implemented health programs will help keep costs down and productivity up worldwide."

Despite plans of some multinationals to add health and productivity programmes in other regions of the world, these programs remain much more prevalent in the U.S. For example, almost all (93 per cent) of multinationals offer preventive care coverage in the U.S. compared with 42 per cent elsewhere.

Likewise, 76 per cent offer disease management and 70 per cent offer return-to-work programs in the U.S. compared with 21 per cent and 28 per cent respectively outside the U.S..

"The trend toward increasing health and productivity programs coincides with growing evidence that these programs are providing a return on investment and driving down costs," said Shelly Wolff, national director of health and productivity consulting at Watson Wyatt.

"As multinationals gain more experience in this area, it is likely that their use of health and productivity programs will continue to steadily grow in all regions. The benefits from improved worker health and productivity are universal."

Unsurprisingly, the survey also found that multinationals are far more concerned about rising health costs in the U.S. than elsewhere. Forty-five per cent of their CEOs are greatly concerned about cost trends in the U.S, while only eight per cent are concerned about trends elsewhere.