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Healthier habits and behaviour change required to lower healthcare costs

23 August 2011 Aon South Africa
Andre Jacobs at Aon South Africa

Andre Jacobs at Aon South Africa

The rising cost of healthcare in South Africa is a cause of major concern for employers, with annual medical inflation in South Africa currently running at 5.4% as at 30 June, according to latest statistics by Statistics South Africa.

According to Andre Jacobs at Aon South Africa, one of the most effective ways for companies to keep these healthcare costs under control is by putting proactive measures in place to encourage healthier employee habits and behavioural changes.

Jacobs says that a recent Aon Hewitt survey in the US, a country which is experiencing similar healthcare cost pressures to South Africa, revealed that rewarding and penalising employees on their behaviour is becoming an increasingly popular strategy for driving down costs.

The Aon Hewitt survey showed that 22% of employers will have programs in place by the end of 2011 to reward participants for achieving specific health outcomes, and 10% will have similar programs to penalise participants for exhibiting unhealthy behavior. However, by 2016, 64% of organisations said they will add programs that reward for good health, while 46% said they will add programs that penalize for unhealthy outcomes.

“The use of monetary rewards is an increasingly popular mechanism to incentivise employees to participate in key initiatives, such as biometric screenings, health risk assessments, wellness programs and tobacco cessation programs. Conversely, some employers are imposing a penalty for non-participation in biometric screenings, health risk assessments, wellness programs and tobacco cessation programs.”

Jacobs says that particularly in a challenging economy, organisations are using financial incentives, as a mix of rewards and penalties, to motivate behavior change. "However, leading employers also recognize that success requires more than just money; those organisations also focus on marketing health improvement services, eliminating barriers to needed care and measuring the impact of specific interventions."

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