According to the US National Institute of Ageing, some countries will grow old before they grow rich – and less-developed nations may be forced to confront issues such as social support and the allocation of resources across generations without the economic growth enjoyed by ageing societies in the West. This means that governments will be faced with the difficulty of paying to care for an increasing number of elderly dependents’ healthcare and social costs with a smaller working population.
More than half of the world’s ‘oldest old’ (people over the age of 85) live in six countries: China, the US, India, Japan, Germany and Russia. And, in many countries, the ‘oldest old’ are now the fastest growing portion of the total population.
A rising retirement age
We are, therefore, seeing more older people in the workforce too – increasingly larger proportions of the workforce are 55 years of age and older. One reason why is that, in some countries, there are fewer younger workers entering the workforce because of falling birth rates.
Take Japan, for instance – a shortage of roughly one million employees in 2015 and 2016 is estimated to have cost nearly US$90 billion. Many countries are facing an unprecedented shift in the age structure of their populations and this is replicated when you look at workforce age demographics too.
While this is a good thing, as it shows advancements in science and technology, public health and in standards of living, this means that companies can and will have to employ more older workers. Yet, we rarely see longevity being factored into the design of employee benefits (EB) programmes at the moment, and this will have to change, in our view.
Proactive screening for chronic conditions
Older employees have unique requirements – from HR policies and employee benefits, to pensions and career development. Getting older is also the primary risk factor for many acute and chronic health conditions – which increases medical costs and on-demand interventions by health providers, employers and their benefits partners.
For instance, simply reaching the age of 50 increases a person’s chance of getting cancer by 100 times, whereas smoking increases the risk of cancer by five times. There are wellness programmes for drawing attention to the bad effects of smoking and there are laws, regulations (including taxes) and legislation to prevent smoking, which has a five-fold increase in risk, yet there are almost no wellness programmes to combat ageing, which carries a 100-fold risk.
It should therefore come as no great surprise that one of the greatest challenges facing employers (and therefore also international private medical insurance (IPMI) providers) is providing cover and caring for their employees’ chronic conditions.
Offering proactive screening for all employees, not just older employees, is crucial for flagging up these conditions before they become costly
Incidences of chronic conditions, including back pain, diabetes and hypertension increase as people move into the 50 to 70 age bracket – and the costs of managing these gets much higher. As such, catching these conditions early is key. The data from our multinational clients shows that incidences of chronic conditions actually begin in the 30 to 40 age bracket.
Offering proactive screening for all employees, not just older employees, is crucial for flagging up these conditions before they become costly. And educating people via wellness campaigns focused on the lifestyle factors that can trigger these conditions is important for helping employees adapt negative behaviours that could make them sick in the first place.
Indeed, companies that can design policies, benefits, workplace infrastructure and workforce strategies around this ageing global workforce (and these can include education programmes focused on chronic conditions, access to wellness solutions like employee assistance programmes and chronic diseases management, or even HR policies) can reap a ‘longevity dividend’. Organisations that don’t adapt face rising employee benefits costs, worsening employee health, retention problems and a growing skills gap.
The growing importance of wellness in the IPMI market
One of the more notable trends of IPMI product offerings has been with regards to wellness. Wellness benefits, particularly preventative screenings, have been largely missing from IPMI products up until a few years ago. Now, that is no longer the case – wellness is no longer a concept that is limited to large corporates in sophisticated markets, but something that has gained momentum globally.
We believe that wellness will grow in importance as a way for multinationals to address challenges of an ageing workforce. Chronic diseases like diabetes, cardiovascular diseases, hypertension, etc., accounted for seven of the top 10 causes of death last year. Healthcare costs for a person in the US with diabetes are over $13,000/year; for a person without diabetes, it is only $2,500.
If an employer-driven wellness programme manages to reduce by just one-point HbA1c (a measure of blood sugar over time), it means that that programme was able to have a 40-per-cent reduction in a person’s risk for developing diabetic complications like blindness, kidney disease and nerve damage – and up to $4,100 can be saved in annual healthcare costs. It’s a win-win for the employer, the employee and the insurer – wellness products help ensure a healthier and more productive workforce while tackling rising medical costs. ■