Healthcare schemes feeling the strain

Aug 15 2003 by Brian Amble Print This Article

More than four out of ten companies say they will cut eligibility for healthcare benefits if costs continue to rise, according to a new survey by Mercer Human Resource Consulting.

Increased government investment in the NHS has provided little relief to companies. Fewer than two out of ten employers say that the extra money invested will reduce pressure on employers to provide healthcare benefits.

"Confidence in the NHS has waned, and more employees now turn straight to private healthcare, which can treat increasingly complex conditions. As a result, the number and size of medical claims have escalated, and company schemes are feeling the strain," said Steve Clements, European Partner at Mercer.

However, eight out of ten companies believe they would have difficulty attracting and retaining good employees if they did not offer private healthcare. Nine out of ten also consider that providing healthcare is an important part of being a caring employer.

The survey found that eight out of ten employers believe that improved employee productivity currently justifies the cost of providing healthcare benefits and services. Nevertheless, the results indicate that not all employers have the data to measure the return on their investment.

While nearly three-quarters of companies say they can easily access data on employee absence levels, this figure drops to under two-thirds for those who can identify the causes of absence. Under half say they can easily measure the impact on productivity from employee absence and fewer than four out of ten calculate the full cost of absence to the organisation each year.

"The full cost of employee absence can be nearly a quarter of company payroll," said Mr Clements. "Costs can be reduced, but to do that employers need the right information to identify where the problems lie. Many still rely on intuition or spurious data."

Over half of the companies surveyed also say that ill health due to stress is a significant issue. "The causes of work-related ill health have changed dramatically in recent years, but most organisations have not adjusted their healthcare provision to keep pace," said Mr Clements. "The most prevalent medical conditions today need managing in a very different way to those of the past."