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Multinationals Lack Health/Productivity Strategies Outside U.S.

   6/12/2006

Multinational companies have developed strategies to improve the health and productivity of their U.S. employees and thereby lower health care costs, but they have not been as proactive in other regions of the world, according to a new survey by the consultancy Watson Wyatt Worldwide. However, as health care costs rise around the globe, multinationals are increasingly adding these programs worldwide.

The survey of 90 multinational companies found that 65 percent currently have a strategy to improve the health and productivity of their workers in the United Statesincluding preventative care, disease management and return-to-work programsbut significantly fewer have put in place similar initiatives in Canada, the Asia-Pacific region, Europe and Latin America. Although many of these multinationals plan to develop a health and productivity strategy in these regions over the next two years, they will still lag behind their U.S. operations by a wide margin.

Multinationals that plan to develop a health/productivity strategy outside the United States over the next two years:

 

Currently have strategy

Plan to develop strategy over the next two years

United States

65%

18%

Canada

22%

33%

Asia-Pacific

21%

30%

Europe

16%

28%

Latin America

15%

21%

Source: Watson Wyatt

Multinationals have used health and productivity strategies in the United States to help combat the enormous burdens of rising health care costs, says Bob Wesselkamper, director of international consulting at Watson Wyatt. Outside the United States, multinationals have been somewhat insulated from increasing health care costs, but they may find that things are changing. As many countries consider reducing state-funded health benefits, multinationals will find that well-implemented health programs will help keep costs down and productivity up worldwide.

Despite plans of some multinationals to add specific health/productivity programs outside of the United States, these programs are currently much more prevalent within the United States:

 

Offered within the United States

Offered outside the United States

Preventive care coverage

93%

42%

Disease management programs

76%

21%

Return-to-work programs

70%

28%

Source: Watson Wyatt

The trend toward increasing health and productivity programs coincides with growing evidence that these programs are providing a return on investment and driving down costs, says Shelly Wolff, national director of health and productivity consulting at Watson Wyatt. As multinationals gain more experience in this area, it is likely that their use of health and productivity programs will continue to steadily grow in all regions. The benefits from improved worker health and productivity are universal.

The survey also found that multinationals are much more concerned about rising health costs in the United States than elsewhere.

Among multinational CEOs:

  • 45 percent are greatly concerned about cost trends in the United States.

  • Only 8 percent are concerned about trends outside the United States.

Stephen Miller is the editor/manager of SHRM Online's Compensation & Benefits Focus Area.

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