With healthcare costs in the UAE continuing their steady rise, businesses are starting to get uneasy about the prospect of their insurance premiums reaching potentially unmanageable levels.
Healthcare spend per person in the Emirates is about Dh4,408, putting us in the top 20 when it comes to per-capita country health expenditure. That translates into a rather heavy burden as those premiums are expected to rise on average by about 5 to 10 per cent per year.
Major factors contributing to these rising costs include the poor health of the nation, where more than half the population is either overweight or obese; fraud and abuse, where the cost is anywhere between 5 to 15 per cent of total claims; and a general lack of control over healthcare spend, such as unnecessary hospital visits or an overuse of brand name medicines, where generics are readily available.
But companies are well positioned to bring healthcare costs under control and their involvement is essential to reversing the rising cost.
A proactive approach can, when properly executed, reduce a company’s health costs by 20 per cent or more. Here are the main issues that can be addressed:
1. Analyse past spend on health care
Find out where your money is going. A careful look at your historical spend can detect patterns of fraud and abuse and identify health trends across the organisation.
Billing for unnecessary tests and procedures and overprescribing medicine can be relatively easy to spot through frequent audits.
And mapping out the general health of your team helps you identify what the more common and expensive chronic conditions. This can then help decide where best to focus wellness initiatives.
You’ll then want to establish ties with a restricted network of providers. These providers can set frameworks to ensure there is no unnecessary testing going on. With tests and minor procedures generally doubling the basic consultation fee, companies that carry out tighter benchmarking will quickly see significant cost savings.
2. Use generic drugs as opposed to branded drugs
A large proportion of costs are down to the sky-high price of medications. Yet spend here could be reduced greatly by shifting away from branded medications to their generic counterparts.
Here in the UAE, generic medications, which can cost 80 to 85 per cent less than branded alternative, make up 20 per cent of the market, and it is businesses who most often pay the price. Yet the only things different about generic medications are the inactive ingredients – none of which have any bearing on the therapeutic action of the drug.
Businesses need to implement generic drug policies. Work with healthcare providers and pharmacies to draw up approved lists of medication for your staff and, whenever the generic alternative is available, it should take priority.
3. Offer flexible benefits
A flexible benefits package can take into account individual circumstances, allowing your employees to handpick the benefits suited to them.
4. Invest in health and wellness programmes
Businesses the world over are turning to such programmes to help spot, manage and even prevent common health conditions. Initiatives can include regular health screenings, nutritional guidance, gym memberships and smoking cessation courses. According to a 2013 study from Ohio State University, employees who smoke cost their employers on average about US$6,000 per year in lost productivity, absenteeism and healthcare costs.
These programmes work: a recent US study found that where organisations implement workplace wellness programmes, employee medical costs fall on average by about $3.27 for every dollar spent – with sick leave down by as much as 28 per cent.
5. Provide high-quality health and safety training
Aside from the human tragedy, there are tremendous costs associated with workplace accidents. According to the Occupational Safety and Health Administration (OSHA), American employers pay out about $1 billion a week in worker compensation. If you are operating in an industry where certain job roles mean exposure to risk, the need for continuous health and safety training cannot be overstated. The American Society of Safety Engineers says that 99 per cent of workplace accidents are in fact preventable.
Mark Adams, is the chief executive of Anglo Arabian Healthcare