Debi O’Donovan, editor of Employee Benefits: Employers may have to pick up tab for staff health costs in the future

The cost of healthcare is rising. That fact is all too apparent to any benefits manager trying to juggle their private medical insurance or group risk budget.

But as the World Health Organisation’s June 2011 figures show, healthcare costs are rising at government level, too. Between 1995 and 2009, total expenditure on healthcare in the UK as a percentage of gross domestic product (GDP) rose from 6.8% to 9.4%. To put it another way, healthcare expenditure as a percentage of overall UK government expenditure rose from 13% in 1995 to 15.1% in 2009. It is no surprise, therefore, that the government is looking for health savings, such as the £20 billion efficiency cuts in the NHS.

This is leading many to believe that, in the long term, we will see responsibility for healthcare costs being pushed onto employers and staff and away from government and the NHS.

Just as we have seen that fewer employees honestly expect to be fully supported by the government in their old age through a state pension, forward-looking health advisers can see a time when we no longer see the NHS as our primary supplier of healthcare needs.

This is important to grasp now, as we point out in our article ‘How to cope with the rising costs of healthcare benefits‘ especially because the future health impact of conditions such as rising obesity will hit hardest at the point where employers find they have to pick up the tab.

All the talk of staff wellbeing, fitness and healthy living is not just a nice-to-have; it will become a crucial cost-saving measure in future decades. But I suspect many employers will happily walk into this crisis doing nothing, believing it is not their problem to deal with now.

Luckily, not all employers have this attitude, as the participants in the Employee Benefits/Cigna roundtable debate demonstrate in our Sickness Absence special report this month. These employers are tackling potential chronic conditions now and reaping the benefits of a more engaged and healthier workforce.

On a different note, I would like to say a huge thank-you to everyone who made Employee Benefits Live 2011 such a success. Without the great support of all our exhibitors and speakers, we could not host this grand coming-together of the benefits industry.

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Debi O’Donovan, editor

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