Dubai: Don’t go by the dip in healthcare costs during the COVID-19 year – they are all set to shoot up again. In fact, cost of accessing medical treatment could be higher than general inflation rates by as much as three times – that’s according to the global insurance brokerage firm Marsh.
It will add up to quite a cost for UAE businesses as well, when it comes to providing mandatory health cover or employees. Based on Marsh’s estimates, the cost spike derives from the “cancellation of many elective procedures and a fall in preventive/emergency treatment has led to worsening health conditions in the immediate and long-term”.
So, all the - non-COVID-19 - medical expenses that did not happen in 2020 were only getting postponed, not written off altogether. Many businesses have shaken up their workforce numbers, by letting go during the pandemic phase. And when the time came for insurance renewals, they cut down on several medical benefits that employees had access to in their previous plans.
All in the name of cutting their costs to size - “Businesses are urgently seeking ways to economise and improve efficiencies in their health-related plans,” said a statement from Marsh.
According to the company, there are three ways that businesses can pare down their insurance-related bills and yet offer employees an optimum level of healthcare support.
A poor plan
Misdiagnoses, complications, and hospital-borne infections can be a “consequence of poor initial care” and add cost and degrade the patient experience. “Employers face paying for medical wastage, disability, and absence, and employees are left worse off, with some experiencing a decrease in quality or even length of life,” Marsh states.
“Firms should consider introducing cost-sharing techniques like deductibles and co-payments; ideally tiered in a way that encourages cost-effective care. Establishing defined contribution approaches allow costs to be shared with employees while broadening choice.
“Similarly, employers should look at pre-authorisation for specialist visits or pre-approval and paying providers for treatment packages as an alternative to an a la carte approach to ensure they have the incentive to manage complications.”
Data-driven
Circulatory, gastrointestinal, and respiratory conditions are largely related to lifestyle choices, and continue to drive the cost and frequency of claims. “Understanding the risk profile of your employees and their dependents — and managing these through data-driven initiatives – will have a significant long-term impact on costs,” Marsh states.
“Firms are encouraged to consider embracing health promotion wherever possible, establishing a health culture, that includes vaccinations and illness/ injury prevention initiatives. Such a proactive approach should look to provide support for people at risk of illness due to lifestyle, family history, or their working environment.”
Additional support for employees with medical conditions can help tackle the progression of disease.
Eliminating inefficiencies
Firms should look to eliminate redundant or duplicate benefits by consolidating existing plans. “Managing wastage is a critical component of cost containment, as plans can involve significant frictional costs such as administration, profit, and risk charges. A “loyalty-based” approach that provides price concessions in return for longer contract terms or obtaining competitive pricing through volume discount should be considered,” the brokerage firm adds.
