Healthcare on the Global Stage – What is HRO’s Role?

Health and welfare have been linked not just to healthcare and productivity costs, but to global economic development. In the HRO community, we tend to think of healthcare in terms of the impact on employer costs. Current U.S. healthcare reform reminds us it is an issue of national importance. We need to think even bigger.

According to a joint collaboration that began in 2009 by the World Heart Foundation, World Health Organization, and the World Economic Forum, employers are the best placed to encourage the healthy lifestyles that can positively impact chronic diseases, which are viewed as a global threat to human lives and continued economic growth and development.

Wellness is more than a “nice to do” program; it is an economic imperative, a competitive advantage, or a liability for employees, employers, and countries.

Whether the majority of healthcare expenses are borne by employers or the government, it is part of the total cost of doing business. In a study reported by HR Magazine, illnesses impacted by lifestyle cost the U.K. £17.7bn annually and could escalate to £33bn by 2025. And that is just the costs of three problems: obesity, alcohol abuse, and smoking!

Leading multinational companies are addressing health and welfare benefits from several perspectives: value-based care about employees, healthcare and benefits costs, productivity and the cost of absence, and talent attraction and retention.  Many aspects of benefit plans will continue to be shaped by local influences, but with an eye to overall equity across a global workforce.

The long view is sometimes needed to show wellness ROI. Lifestyle behaviors are not easy for many of us to change. For example, in the U.S. it has taken many years but there has been a significant reduction in smoking and smoking-related deaths.

Determining the optimum balance of centralization and decentralization and establishing a corresponding governance system is equally important as selecting the right delivery systems. HRO providers tracking client outcomes are in a great position to help build business cases for wellness and share best practices on what works and how to determine results. Clients, look for HRO vendors with a broad range of experience in change management that can help your organization move forward.

As a linchpin in the healthcare value chain, top tier benefits service providers can bring a powerful cross section of approaches including: research, consulting and design, investment financial advice and services, benefits administration, employee communications and decision support tools, emerging total absence management and employee advocacy services, third party vendor management, and analytics. HRO benefits leaders can also become influential advocates on the national and international stage impacting policy and regulations for millions.

Are you and your benefits vendor partner ready for the global healthcare stage?

Linda Merritt, Research Director, HRO, NelsonHall

HRO Tips You Can Use

1.  Buyers, U.S. healthcare reform will continue — be prepared.

At the Mercer client conference last week, it was very helpful to hear its view of the precarious future of the U.S. healthcare reform. The healthcare reform act is being challenged in court in whole and in part and the outcome is uncertain. In the meantime, dates for further implementation are rolling near. Mercer posits that the act is unlikely to be repealed in total, but some amendments will likely be changed. Some are concerned large employers will dump employees into state healthcare exchanges and pay the relatively small penalties. Terms in the act make that unlikely as subsidies decline as income rises and are eliminated totally at $100,000. Also, larger employers need to compete in the war for talent and providing healthcare benefits will keep them in the game. The advice for smaller employers may be different and hybrid employee segment coverage models may develop.

2.  Misaligned expectations and poor implementation can still kill a HRO deal.

At lunch, a buyer told the sad tale of a failed initial outsourcing experience. By now, you know the too often told tale: misaligned expectations, a botched implementation, and an adversarial governance relationship that was not healed in time to save the deal. In retrospect, the benefits manager can see that they were 49% at fault, which includes failing to appoint a full-time implementation project manager or addressing the internal change management issues that come with first time outsourcing. The client is now with Mercer, providing a happy ending that was earned the costly way.

3.  Have a social media curator.

Brand management has changed permantly; any illusions of controlling your own brand are being shredded by social media and the same will be true of employment brand management. Can your HRO vendor manage its own brand socially and can they help you manage yours?

4.  An issue of passion can turn into a global wellness campaign and change lives.

Launching a wellness campaign to reduce healthcare costs and indirectly increase productivity is a worthy business objective. Levi Strauss, very early on, addressed HIV education out of deep concern for its employees and found it needed to first break through misinformation and fear. Now there is a new generation that will get the same education. Value-based passion, along with a great wellness program will be sustained for the long-term, helping employees and their families as well as generating savings.

5.   Vendors, invite industry analysts to your client conference.

Hearing the presentations and thinking about how they inform in ways that showcase the strengths of the service provider (perhaps stimulating further inquiries), speaking informally to clients, and looking for the consistency and continuity in what was said to industry analysts and now to clients. It all helps build a 3-D view into the vendor’s world.

Are you ready for your HRO 3-D close-up?

Linda Merritt, Research Director, HRO, NelsonHall