More than two thirds (67%) of businesses are investing in preventative healthcare to tackle soaring medical inflation, according to the Changing Face of Employee Health global report from Howden Employee Benefits.
The international report is the first of its kind to take a comprehensive 360 view of the medical trends landscape, analysing data from insurers, employers, and employees from key regions around the world. The report shines a light on the human element of healthcare, and the growing importance of having it as a primary benefit across the globe.
This comes as employee health increasingly emerges as a top priority for employees. More than three in five (61%) are now more likely to stay with an employer who offers a good healthcare package, and nearly half (47%) view it as an important factor in looking for a new role. Only 7% of global workers do not think it is an important benefit.
This emphasises the need for businesses to address their healthcare offering, but this is challenging to navigate in a high-cost environment. As a result, employers are increasingly taking steps to mitigate rising costs, with the majority investing in prevention and wellbeing. 67% of employers globally have utilised this strategy, and 55% also listed it as being the strategy which has worked best for them, which is largely mirrored across the world.
Who is investing the most in prevention and employee wellbeing measures?
Europe
74%
UK 72%
LATAM 71%
Pacific 69%
Asia 56%
IMEA 55%
Medical inflation is driving this investment. With Howden Employee Benefits predicting from its insurer data that medical inflation will reach 7% in 2026 – net of CPI, meaning total inflation will be well over 10% – this is going to have a profound impact on employers, leading many to restrategise and rethink their provisions. As a result, businesses are shaking up health plans despite feeling that they are already getting a good deal.
While the vast majority of employers believe their current healthcare plans meet the needs of their staff, a quarter (25%) of employees do not agree that their employer supports their wellbeing, highlighting a substantial gap – and while investment plans may be working, there is scope for improvement as a significant number of employees are yet to feel the benefit.
Howden Employee Benefits’ report also highlights a discrepancy between what employers are planning to do against how they feel their current plans are working. The majority of global employers (86%) believe they are getting a good return on investment (ROI) from their private healthcare outlay, and 93% of global employers also believe their current health plan meets the needs of employees.
This provides an interesting disparity against potential changes employers have already made, or are planning to make. Nearly a quarter (23%) of employers have already switched healthcare providers to get a better deal and 39% are planning to do so, while 26% have not yet made plans to switch – but would consider doing so if they get a better deal.
The uplift in investment comes as 93% of global employers expect their medical costs to rise, and 41% anticipate a significant rise. While this is a major consideration across the globe, it is impacting regions differently. For example, businesses in IMEA expect medical costs to rise by 58%, compared to 27% for those in Europe (not including the UK at 28%).
Significant cost rises across other regions:
● 52% – Asia
● 46% – LATAM
● 36% – Pacific
Glenn Thomas, CEO and Global Practice Leader of Health and Employee Benefits at Howden, commented: “The findings show a fast-moving landscape shaped by AI, new treatments and rising costs. Employers feel the pressure, and organizations that recognize their people as their greatest asset protect productivity and growth. The data reveals a clear gap between employer intent and employee experience. Healthcare benefits are now essential for talent, yet many workers still feel unsupported. Leaders need to act. The pressures outlined in this report show the pace of change, and benefits must stay cost effective and genuinely fit for their people.”
Neeran Choudhary, National Head – Employee Benefits, Howden India: “Across India Inc., there is a growing realization that employees are not just resources in fact they are the greatest assets driving organizational success. In today’s competitive landscape, investing in employee health is no longer optional rather it is critical for retaining high-performing talent and building a productive workforce. With medical inflation rising, organizations must look beyond traditional illness and accident coverage. Employee benefits now encompass holistic well-being, requiring innovative solutions and mindful coverage strategies to keep premiums cost-efficient and competitive. We believe that a proactive, risk-managed approach to employee benefits is the cornerstone of sustainable talent management.”
