A new study released this week by Mercer Marsh Benefits indicates that post-COVID-19, employers will need to relook, if not entirely overhaul, their approach to employee health and benefits. The study, which surveyed 239 insurers across 56 countries, found that medical costs around the world are projected to outstrip the pace of inflation by an average of 7.5 times this year, with the trend expected to continue in 2021—attributed partly to the long-term effects of the virus, partly to health issues related to remote working, and partly to medical treatments having been deferred during lockdowns for much of this year. This has several important implications for employers.
The need for preventive care
Public healthcare systems have already been gradually shifting towards preventive healthcare as a way of reducing ballooning future costs, and employers need to follow this trend—ideally by managing health risks before they become full-fledged problems. The study found that metabolic and cardiovascular risks are the top risks influencing employer medical costs, just as they are among the leading global risks for mortality based on WHO statistics. These risks are also manageable through personalized support and interventions, which many public healthcare systems are increasingly providing, and which employers are well-placed to provide within their own purview.
The report suggests: "Business leaders must decide whether they will move on from a long-held position of providing market-practice benefits and take a stand to enhance health and quality of life for society as a whole, inclusive of direct benefits to their bottom line."
The need to tackle emotional and mental well-being
The study found that the health risks associated with poor emotional and mental well-being are on par, or greater than, the health risks associated with smoking—suggesting that the costs associated with these risks will eventually mount to similar levels. COVID-19 has further exacerbated the prevalence of mental health issues, but according to the study, employment benefits still are not keeping up. Less than 50 percent of insurers in Asia, for example, cover treatment for mental health, and 38 percent do not cover mental health services at all. Employers need to demand coverage for these services, and beyond that, they need to implement their own mental well-being strategies.
Renee McGowan, CEO of Mercer Asia said: “Beyond providing access to adequate care, employers should implement a broader mental well-being strategy which considers the removal of stigma, consistent mental health policies, and training for supervisors and employees. Access to mental healthcare is critical for a healthy and productive workforce.”
The need for digitally accessible healthcare
According to the report, the majority of employee benefits systems today are not designed to be accessed or managed remotely, meaning that many employees who shifted to remote work may have been losing out on benefits for months—and that those employers, in the future, will be losing out on global talent.
On the bright side, employers have been expressing interest in digital health solutions for some time now, with other research by Mercer indicating that 68 percent of employers were planning to invest in digital health even before COVID-19. And to match the demand, 50-60 percent of insurers globally now offer coverage of telemedicine to some extent, although the number drops to 36 percent for telemedicine services for mental health.
Healthcare solutions need to be more targeted
Finally, employers need to move away from a benefits model that simply follows market practice, and focus instead on the healthcare goals that will make an actual difference to the business.
Pointing out that modernized solutions will not just improve employee well-being, but also help with cost control, McGowan said: “The pandemic has provided an opportunity for us to rethink and reimagine health plans beyond just buying insurance. More importantly, we hope business leaders can step up to the challenge of addressing inequities in care accessibility, affordability and quality so communities and societies can, too, be strengthened.”