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Rising healthcare costs present dilemma for firms



More than 4 in 10 companies will cut eligibility for healthcare benefits if costs continue to rise, a new survey claims.

However, 8 in 10 companies believe they would have difficulty attracting and retaining good employees if they did not offer private healthcare, the survey by Mercer Human Resource Consulting found.

Although 8 out of 10 employers believe that improved employee productivity currently justifies the cost of providing healthcare benefits and services, not all employers have the data to measure the return on their investment – with fewer than half saying they can easily measure the impact on productivity from employee absence.

“The full cost of employee absence can be nearly a quarter of company payroll,” said Steve Clements, European Partner at Mercer but he pointed out that “many still rely on intuition or spurious data”.

Key findings revealed that:

  • Only about a third of the companies surveyed calculate the full cost of absence to the organisation each year.
  • Less than two-thirds can identify the causes of absence.
  • Over half identified ill health due to stress as a significant issue.
  • Four in ten respondents say that over the past few years they have failed to successfully manage their healthcare benefits through effective integration and co-ordination.

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