Healthcare benefits spend is increasing and more employers are using brokers, but most still do not calculate their return on investment, says Jennifer Paterson
Most respondents use an intermediary or broker to buy healthcare benefits. The use of intermediaries or brokers continues to rise, with 75% of respondents doing so this year, up from 64% in 2010 and 60% in 2009.
Using intermediaries and brokers for advice and to buy products has also risen in popularity. Some 86% of respondents now do so, following five years of steady growth.
A much smaller percentage (17%) use intermediaries and brokers only to buy specific products. This is almost the same proportion that did so in 2006 (19%), although it has fluctuated over the years.
Private sector organisations continue to be the most likely users of intermediaries and brokers. The majority (87%) now do so, compared with just 27% of respondents from public sector organisations.
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The cost of providing healthcare benefits, as estimated by employers, has varied little over the years.
Given the huge amount of pressure the difficult economic climate has put on employers to justify their expenditure on benefits, it is surprising that the percentage of respondents that say they do not know how much their organisation spends on healthcare perks has remained relatively high over the years. It will be interesting to see whether this changes in the coming years.
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Over the past five years, employers have typically had a poor record when it comes to calculating the return on investment for their healthcare spend. This year, just 10% of respondents say they measure the business benefits they are getting for their money.
At first glance, it is encouraging that just under a third (31%) of respondents say that they are planning to calculate their return on investment on their healthcare benefits spend. However, this figure has also remained relatively static over the past four years, so these intentions do not appear to be translating into action. This is surprising given the increased focus on cost and obtaining value for money experienced by many employers during the economic downturn.
Measuring return on investment can be a tricky business as there are a number of factors besides healthcare benefits that can impact on issues such as sickness absence, staff productivity and engagement levels. Where employers do calculate return on investment, for the past four years, sickness absence levels have been the undisputed leader when it comes to the measures used.
This year, joining sickness absence levels as the most popular measure are employee engagement or satisfaction levels used by 92%. This is up from 67% in 2010 and 75% in 2008.
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