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Health Trends Insights – Deep Dive

Four ways for employers to manage rising healthcare claims

Businesses find themselves prioritising their HR policies and benefit plans as they strive to achieve a balance between maintaining the physical and mental health of their employees, and managing the associated health and benefit costs.

08/05/2022 · 3 minute read

Medical costs are on the rise in 2022 across the Middle East and Africa (MEA) region.

Businesses of all sizes and industries felt the pressures of the last few years and many are still dealing with challenges brought on by the pandemic and the resulting changes in the ways of working.

Now businesses find themselves prioritising their HR policies and benefit plans as they strive to achieve a balance between maintaining the physical and mental health of their employees, and managing the associated health and benefit costs. A key contributor to medical cost increases is rising claims activity and 62% of insurers surveyed in the MEA region are expecting claims to continue rising and to potentially exceed pre-pandemic levels.

The key aspects that are driving increases in claims activity across MEA are non-communicable diseases and Covid-19 related claims.

Top drivers of claims across MEA

Non-communicable diseases

Non-communicable diseases are chronic conditions that aren’t passed on from person to person. These include respiratory conditions such as asthma, metabolic diseases such as diabetes, and cardiovascular conditions such as hypertension. Many chronic conditions are influenced by lifestyle, and could therefore be worsened by a lack of physical activity, poor dietary habits, and increased sedentary behaviour. In the MEA region, chronic condition occurrences remain very high in comparison to global standards, with respiratory conditions, diseases of the circulatory system, and endocrine and metabolic diseases accounting for the top three chronic conditions driving claims activity. 

How does this impact employers?

In the case of employer-provided healthcare, increases in medical costs place financial pressures on employers and can impact their bottom line. Besides the cost impact, an unhealthy and unproductive workforce increases cases of absenteeism and presenteeism, which can negatively impact productivity and quality of work as well as lead to further people risks such as errors and accidents in the workplace.

Covid-19 related claims activity

During the pandemic, insurers and employers experienced a substantial reduction in claims activity because of lockdown restrictions and deferred elective procedures. Claims activity is now rebounding and seems to be exceeding pre-pandemic levels as many patients need more extensive and expensive medical treatment due to delayed care and lack of access to preventative screening during the pandemic. The pandemic also had an effect on employees’ mental health, resulting in increases in claims activity relating to mental health conditions and increased costs for wellness benefits.

How does this impact employers?

Covid-19 had a major impact on employees’ financial, physical and mental health. Mismanaging or ignoring employee mental health and overall well-being can expose employers to people risks such as increases in absenteeism and presenteeism, reductions in motivation and productivity, and increased occurrences of workplace accidents and errors. Employers also risk losing quality talent to competitors and may have challenges attracting top talent.  

Employer actions: Four ways to manage healthcare claims

  1. Employers should consider preventative care and self-care support as part of their benefit plans to help manage employee health and reduce claims.
  2. Educate employees on the importance of their well-being and how to better manage their health. A consistent employee communication and awareness program can help employers improve the overall health and well-being of their workforce, thereby containing healthcare costs.
  3. Use data and analytics to understand how employees are using their benefits and where utilisation could be improved or better managed.
  4. Include mental health and wellness offerings as part of employee benefit plans, not only to support employees who are ill but to promote overall workforce health and well-being.

Report

Middle East & Africa Health Trends Insights

Mercer Marsh Benefits (MMB) surveyed 210 insurers across more than 50 countries, including  the MEA region, to identify the key trends that are shaping the future of health and benefits around the world (Report: MMB health trends).

Download the report

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