Overview

While the health care landscape looks different around the world, every organization faces consistent challenges: rising health care costs for individuals and employers as well as ever-increasing chronic health conditions such as diabetes and heart disease. Business leaders must therefore balance controlling costs and encouraging their workforce to live healthier lives. And a growing number of organizations are considering partnerships between risk management and human resources (HR) to achieve this balance.

As Carl Redondo, global benefits leader at Aon U.K., explains: “Better data can be used to drive what the HR side would call ‘interventions’ that from the risk-management perspective would be considered ‘risk-mitigation strategies.’”

If data-sharing were at scale in an organization, such “risk-mitigation strategies” could include identifying specific risk areas within an employee population, which would then help HR teams develop specific action plans.

Dr. Amitabh Deka, head of Wellbeing Solutions at Aon South Asia, underscores the challenge: “Employers face the conundrum of managing the health of employees of different backgrounds.”

Says Deka, “Data – whether from an employee’s wearable or from the individual’s specific claims history – can help identify various areas of focus across groups. For example, shared data can help identify areas of risk within an employee segment and areas of opportunity to decrease costs and, at the same time, improve health care outcomes of employees.”

The first big step in this process is to break down an organization’s barriers. “In many organizations, individual departments can be protective about letting other areas of the business get involved with their data at a detailed level,” Redondo says. However, he argues, having a level of openness when it comes to the data available – especially as it relates to costs – can help bridge organizational gaps and encourage a new level of decision-making.

From captives (which are self-funded in-house insurers) to wellbeing, organizations are making strides to provide more transparency across teams to ultimately improve the health of the employee and the business.

Mining Data From Benefits Financing Programs

According to Aon’s 2019 Global Medical Trend Rates Report, global average medical costs are rising at a rate of 7.8 percent. Among the conditions increasing medical costs are chronic conditions – such as cardiovascular disease, cancer, high blood pressure and diabetes – many of which are at least partially manageable through behavioral changes.

As costs rise, captives have emerged as a way to finance global benefits programs. Captives can also be considered a means to share data across teams as these programs naturally generate large amounts of data. The data of a captive are then property of the organization. If these data reach scale, they can provide a wealth of information.

“Using your own captive means you use your own data. Because you are your own insurance company, you can see patterns and quickly act upon them,” explains Redondo.

Redondo highlights this dynamic with an example of a global employer that used a captive to work across the company. The organization’s risk-management operation noticed an unusually high incidence of respiratory disorders among the employee population. In turn, the captive was used to finance the purchase of smog masks for the affected workers.

“An HR team would not have been able to make that diagnosis on its own and wouldn’t have had sufficient funding to roll out that smog mask program,” Redondo explains. “In this example, two distinct areas of the business came together to solve for a risk that isolated teams wouldn’t have been able to solve.”

While not all organizations are candidates for captives, the learning is broader: across teams, data-sharing between groups can lead to insights that teams might not be able to achieve.

Captives and Data-Sharing for Wellbeing

Jim Winkler, chief innovation officer of Aon’s Health Solutions, states, “Captives provide better data capture as all claims flowing through the captive are in one place. Having these data increases the depth of analytics an employer can do, thereby improving how programs such as wellbeing which are aimed at reducing health risk and improving workforce productivity, can be better targeted.”

The rise of wearable technologies and health apps (known as mHealth), for example, can help generate the data needed to shape wellbeing programs and keep employees on track with their wellness efforts.

“From access to user experience to analytics, technology has revolutionized the way employers approach preventive health care and wellbeing,” says Deka. “For instance, a personal smartwatch tracking steps to a larger digital wellbeing platform can provide an engaging experience for users to keep track of their health and wellbeing efforts.”

Those data could then inform specific areas of focus for other groups, explains Redondo. “Whether to reduce costs associated with broader benefits programs or to home in on specific areas of employee health-related risks – the partnership between teams is crucial,” he says.

Breaking Down Silios to Reap the Benefits of Better Data

Ultimately, better data shared across teams can control costs while identifying key risk areas.

In many cases, the best way to generate and apply those data is to break down silos and bring an additional perspective to the issue. While HR and risk management might use different language to describe the actions they take as a result of those data, the result is the same – mitigated costs and healthier employees.