Risk factors, cost drivers and emerging areas of focus
The concept of workforce resilience is not new, although the pandemic has forced organisations to focus on their key people-related risks, such as employee wellbeing, talent retention, implementing operational improvements and new, innovative working models and technology.
Social restrictions, remote working and the impact of reduced physical activity has raised awareness of issues like emotional and social wellbeing and what this means for employees. With the impact of the pandemic set to be long-term, and many work models becoming the norm and not bouncing back to pre-COVID-19 models, it’s important that business leaders reinvent the approaches to employee health, safety and wellbeing.
Market Dynamics
Countries continue to navigate different phases of COVID-19 and uncertainty remains regarding the impact on deferred medical treatments and long-term healthcare. According to Jacqui Nel, Business Unit Head of Healthcare at Aon South Africa, many people had foregone their medical preventative checks during 2020 in fear of the pandemic. “The prognosis and medical treatment for diseases such as cancer, heart disease and so on has the potential to be far worse if not caught early on, and hence the delays in proactive health checks and annual medicals is of concern,” says Jacqui.
Aon’s research has confirmed that 2020 had been an unprecedented year, with a widespread reported decrease in employer medical plan utilisation as a result of the pandemic – people have simply avoided doctor visits and important check-ups out of concerns of COVID-19 infection. In turn, Aon forecasts that 2021 will observe the lowest Global Average Medical Trend Rate recorded since its research began in 2013.
“The low claim ratios from 2020 have seen an uptick in 2021, returning to some level of normalcy as people realise they simply cannot avoid medical intervention indefinitely. Medical schemes have benefited from lower claims in 2020 which has led to increased solvency ratios for most medical schemes,” says Jacqui.
“However, medical cost increases continue to outpace inflation and we anticipate continued medical scheme cost escalation due to factors such as global population ageing, overall declining health, poor lifestyle habits and the increased prevalence of chronic conditions. These continue to be global phenomena that are further exacerbated by the potential long-term health impacts of pandemic-related deferred treatments and routine checks, increasingly sedentary lifestyles and deteriorating mental and emotional wellbeing. The impact of all of this down the line remains to be seen as the claiming patterns of members post a COVID diagnosis is still to be determined such as having to be hospitalised in addition to possible long-term side effects of the pandemic,” says Jacqui.
People Risk and Claims Cost Drivers
Top conditions driving medical scheme costs globally
- Cardiovascular
- Cancer/Tumour Growth
- High Blood Pressure/Hypertension
- Diabetes
- ENT/Lung Disorder Respiratory
Top global risk factors impacting adverse claims experience
- Physical Inactivity
- High cholesterol
- Poor stress management
- Bad Nutrition
- High Blood Pressure
Employers have a crucial role to play in terms of helping employees understand their health risk, encouraging and supporting healthy lifestyle behaviours and providing access to high-quality healthcare at the right time. Otherwise, they will continue to face the prospect of added organisational costs and employee productivity losses.
Future Focus
Innovative organisations and healthcare providers are developing strategies to optimise their service delivery formats, with virtual and telehealth playing an increasingly significant role. “There has been a notable increase in the adoption of virtual consultations from a South African perspective. Individuals who are wary of visiting a doctor’s room in person, are more likely to consider a virtual consultation. The adoption of medicine delivery to your door is also becoming more commonplace,” says Jacqui.
People risk, however, remains front and centre for many organisations, and requires a more sustainable and dynamic approach. Prior to the pandemic more progressive organisations had made the connection between a fit, healthy, engaged workforce and business results, and were not simply focused on managing cost.
“Mental health, in particular, has come to the fore as an aspect to be addressed by medical schemes, employers and employees,” says Jacqui. “A direct correlation exists between financial wellbeing and stress-related matters. With South Africa nearing 500 days of lockdown, COVID fatigue is setting in with many individuals and families taking strain, having to navigate no or reduced incomes, scaling down to one income or dealing with ongoing job insecurity. Employees are generally expected to perform at the same level as they have but are having to deal with so much more in the background such as a family member’s illness or death for example, home/online schooling, working from home and managing the balance of work/home life, gender-based violence and a host of other stresses that could lead to burnout and depression. Finding the work-life balance in the current context has never been more important,” says Jacqui.
“For the first time, we are seeing a big increase in the numbers of people at executive management level reaching out for assistance, as they are taking strain in their personal capacity, having to deal with employee events in addition to their own. Leaders and senior managers often have no-one to talk to and offload their concerns to, and many find themselves running on empty while still having to manage and motivate their teams,” she adds.
The implementation of employee benefit programmes that feature emotional support is a step in the right direction. Management teams are having to think differently on how they manage and motivate their staff in a remote or hybrid work model, keeping productivity levels up while creating a supportive environment.
The pandemic has amplified the importance of the resilient workforce, with organisations adapting to rapidly changing workflows, processes and personal circumstances of employees. There is a need to accelerate this focus to a new level, particularly as organisations figure out what their reshaped business models will look like for the foreseeable future. Organisations need to create an inclusive environment where every employee has access to support across a range of wellbeing areas, such as physical, emotional, financial, social and work-life balance. Providing access to high quality health care treatment when needed, and supporting individuals with existing health conditions is important, however, it is imperative that there is increased focus on preventative measures and promoting a healthy workforce by ensuring that proactive care is not neglected due to COVID concerns.