The “health basket fund” where salary deductions are placed into a pool and bills paid whenever employees fall ill is popular in small firms and a few big corporations.
Unless an ecosystem-wide discussions start on how to achieve efficiency and cost-cutting in healthcare, the next decade will offer testing times for employees and employers.
Spiralling healthcare costs unchecked may force firms to adopt potentially unethical caveats like pre-employment medical checkups amonhg others.
A colleague recently shared an interesting statistic pointing towards a worrying scenario for employers. In 2010 at Starbucks peak, it cost the coffee chain more to provide healthcare to its employees than buying its main raw material: coffee.
This statistic may soon replicate in many Kenyan firms. Medical insurance for employees will take up bigger components of their budgets.
No data is available on average expenditure for firm’s per employee, but local premium packages are increasing annually at rates slightly equal to or higher than salaries. This will continue as lifestyle diseases-cancer and other conditions- warrant specialist doctors’ interventions.
There are several approaches in financing employee healthcare. The “health basket fund” where salary deductions are placed into a pool and bills paid whenever employees fall ill is popular in small firms and a few big corporations. Group medical insurance with “common” maximum-caps is the next model. Here funds held by the insurer are used up by employees whenever they visit hospitals on a reducing balance from the group ceiling. While cheaper than individual premiums, it is unpopular since a few employees with serious medical conditions can gobble up the entire amount locking out the rest.
Individual covers are the best option though more expensive. Here an employee has a prefixed personal limit.
Each model has its own pros and cons.
One certainty where private health institutions are dominant is that employers health expenditure will balloon.
Unless an ecosystem-wide discussions start on how to achieve efficiency and cost-cutting in healthcare, the next decade will offer testing times for employees and employers.
Spiralling healthcare costs unchecked may force firms to adopt potentially unethical caveats like pre-employment medical checkups, waiting periods post-employment for eligibility to health insurance, exclusion of kin or total abolition of the benefit. With this in mind it was disappointing to see no input from the Federation of Kenya Employers in the just ended doctors’ strike. The fact is that a strong public health system makes healthcare costs for employers low as it gives employers an alternative outlet to the private sector.
Likewise for employee unions, regular engagement with health system managers and data interrogation are needed on designing best models.
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