Corporate health costs are set to double in Asia in the next four to seven years, according to the Asia Total Health and Choice in Benefits report from Mercer Marsh Benefits.
The report, which studied the future challenges of providing employee benefits in the Asian marketplace, highlights that while people are living longer, they are getting sicker as poor lifestyle habits have resulted in deteriorating general health and an increase in incidence of chronic illness. As a result, costs are being passed on to employers through employer-sponsored health programmes, creating more financial pressure for HR professionals.
Rose Kwan, Partner, ASEAN Business Leader, Mercer Marsh Benefits commented, “While medical advances have allowed us to cope with chronic illnesses, the net effect is that people are living longer but with poorer health, resulting in greater demand for medical care. However, the cost of medical care is increasing every year, and medical inflation is outstripping general inflation significantly.”
Kwan added that in a climate of slower economic growth, business leaders will find it a challenge to shoulder the increasing costs and the associated erosion of profit caused by absence days and loss of productivity as well as rising insurance premiums due to smoking, obesity and other lifestyle choices.
According to Kwan, prevention is better than cure as she stressed, “Targeted intervention and prevention should be a priority so that companies are able to control the ongoing cost of benefits programmes and avoid future costs. Doing anything less simply perpetuates the vicious cost-increment cycle.”
Mercer Marsh Benefits says the number one phenomenon demonstrated by the survey is that, while HR professionals are actively looking for new ways to manage the impact of benefits programmes, many continue to support multiple programs that are not necessarily aligned with the right business outcomes.
Kwan concluded, “HR professionals will need to be more financially vigilant, with targeted implementation and prevention a priority so companies can control the ongoing cost of benefits programmes and avoid future costs that may not yet have manifested. Alternative solutions require investment, but HR professionals must be equipped with the necessary data, tools and knowledge to justify any investment to their business leaders.”
Paul Arkwright
Publisher
