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Dealing with cuts to the healthcare budget: BGM in the crisis

July 12, 2024

In economically uncertain times, which are putting pressure on the budgets of many companies, important areas such as the Occupational health management (OHM) face major challenges. The need to save money often leads to prevention and health measures being cut back. However, our experience of working with health managers shows that it is possible to create effective and attractive programmes for employees despite difficult circumstances. In this article, we share our findings and give tips on how you can create effective and attractive programmes even when budgets are tight. Health promotion in the company.

The importance of occupational health management in times of crisis

The BGM promotes health and Employee satisfactionwhich leads to higher motivation, productivity and fewer sick days. A well-designed OHM can reduce sickness costs in the long term and reduce employee turnover, which in turn minimises recruitment and training costs. In addition to increased job satisfaction and quality of life for employees, occupational health management makes a significant contribution to reducing personnel costs.

BGM is economically relevant

Personnel costs amount to Founder lexicon on average around 30 % to 40 % of a company's total costs and can even amount to 90 % in pure service companies. Although many aspects of personnel costs, such as training or non-wage labour costs, cannot be reduced through health management measures, there are still numerous areas that can be positively influenced. These include the costs of absenteeism and costs associated with the staff turnover rate.

High medical costs are incurred due to absenteeism and presenteeism

The sickness rate has risen regularly in recent years and is currently just under 7 %, which has also led to a huge increase in the cost of days lost. Just how high these costs can be is illustrated in an article by Human resources management. It provides an example of the scenario of what a case of burnout alone costs the company. Spoiler: With an absence of 6 months and an annual salary of €120,000, the costs already amount to €133,000. At this point, we would like to mention that sickness absence and, in most cases, sickness costs only include cases of absenteeism, i.e. absence from work due to illness. However, not everyone who is ill stays at home straight away. The majority continue to work with reduced productivity. It is assumed that cases of presenteeism, i.e. working despite illness, occur just as frequently as absenteeism.

Health promotion can significantly reduce medical costs in the long term

How the iga.report28 showed back in 2015 that companies can reduce absenteeism costs by up to 25 % through workplace health promotion programmes alone. As cost savings alone say little about the profitability of health promotion, this was analysed in relation to expenditure. This resulted in a positive ROI for companies of €1: 2.7 €. In other words, the companies analysed were able to save an average of 2.7 times the costs for every euro invested. This alone should be reason enough for management to maintain prevention measures even in financially difficult times.

Savings through reduced fluctuation

In addition to sickness costs, occupational health management also offers potential savings in the area of staffing. The costs of filling vacancies are often underestimated by management but, depending on the position, can amount to one to three times the annual salary of the vacant position. Starting with the opportunity costs caused by lost added value until a position is filled, there are also the costs of job advertisements and conducting interviews and, if necessary, assessment centres. Further costs are incurred even after a position has been filled, as the training of a new employee reduces the productivity of the colleagues involved and the full productivity of the newly filled position is usually only achieved after three to six months.

By providing attractive health programmes, occupational health management can prevent these costs from arising. On the one hand, employee loyalty and job satisfaction can be strengthened and have a positive effect on a lower staff turnover rate. On the other hand, increased employer attractiveness leads to lower personnel marketing costs.

Strategies for coping with budget cuts

Focus on measurability, data and analyses

In times of crisis, it is essential to focus on sustainable and measurable measures. This begins with data-driven decisions. Absenteeism or data from employee surveys should be used to identify the biggest problem areas and potential for cost reductions in the company. In times of tight budgets, it must also be clear which health programmes have the greatest impact on employee health and satisfaction. Prioritisation plays a decisive role, because it is highly likely that you will have to cut back in certain areas. A thorough Cost-benefit analysis of each measure is therefore essential. By comparing the costs of prevention programmes with the (potential) savings, well-founded decisions can be made.

Another important aspect are Pilot projects. Small, scalable projects make it possible to test the effectiveness of new measures before they are introduced on a large scale. Pilot projects that have produced good results can be expanded and applied to the whole company if necessary, minimising risk and ensuring the effectiveness of your health services. At Deep Care, we have always offered our customers the opportunity to test our services for four weeks for a small fee. The reason for this is essentially the same: as we have developed a completely new approach, we need to minimise the risk for healthcare managers. We are now doing this through standardised pilot projects that use questionnaires to provide maximum insight into the process, reach and effectiveness of our offer.

On the topic: Practical example of successful piloting - Integration of a digital health offering at E.ON

Even if a measure has already proven itself in the pilot project, you should continue to monitor its effectiveness. For this purpose, appropriate KPIs should be defined in advance and in accordance with the purpose that the measure fulfils in the health strategy. This allows you to Continuous monitoring of the measures, e.g. through regular feedback or the analysis of illness data. Strategies can only be optimally developed, improved and justified through constant review and adjustment. Anonymous employee surveys, the analysis of this data and ongoing reporting are therefore an integral part of our health programme. We have even set up a company dashboard for the latter, which gives our contacts access to the current effectiveness evaluation of the programme at any time. Monitoring is so important because it allows you to compare and prioritise measures. It also forms the basis for demonstrating success, allowing you to justify expenditure even in times of a tight OHM budget so that your programmes can continue.

On the topic: How the collaboration with Deep Care works - Workplace prevention with Isa

Ensure that your measures are demonstrably effective

Promoting the demonstrable effectiveness of OHM measures is essential. As already mentioned, this includes the definition of clear KPIs and metrics. In addition, measurable targets should be defined for each measure, which are regularly reviewed and analysed. A project that has met or exceeded the targets should definitely be included in a Success story be transformed. Even if it takes some time to prepare them, it will be worth it. After all, a good success story not only motivates you and your team, but also transforms emotionless data into something meaningful. Documenting and communicating successful measures not only emphasises their positive impact internally, but also externally. This in turn has a positive impact on employer attractiveness and can inspire industry peers. Case studies can help to illustrate the effectiveness and convince management of the necessity and benefits of the measures.

Long-term studies to determine sustainable effects provide valuable insights that can contribute to the continuous improvement of OHM. These studies not only show short-term successes, but also long-term positive effects on the health and satisfaction of employees.

External funding and support from health insurance companies
Utilising external funding

Companies can also utilise external funding to finance the OHM. These include state funding programmes, EU funding, regional funding programmes or grants from associations and organisations. These funding programmes can help to reduce the financial burden on the company and provide access to additional resources. It is worth looking for available funding programmes and checking their requirements to ensure that the planned OHM measures are eligible for funding. By taking advantage of such funding programmes, companies can maintain and expand their health promotion measures even if internal budgets have to be cut.

Support from health insurance companies

Cooperation with health insurance companies is another key strategy for coping with budget cuts. Depending on the size of the project, they usually cover a large proportion of the costs and even fully fund smaller projects. If you already have a contact person, you should ask them about support options and BGF programmes that suit your needs. If you do not yet have a contact person, you can contact the BGF Coordination Centre Make contact. Even if you are already looking to work with a specific BGF service provider, it is worth enquiring whether cooperation with health insurance companies is possible. At Deep Care, we already have co-operations with seven health insurance companies from the statutory health insurance, private health insurance and BKK. These already make up a considerable proportion of our projects and may even overtake direct customer business in the future. In times of crisis, health insurance companies have such a special role because they are obliged to spend a certain budget on workplace health promotion. This budget is not affected by the economic situation and therefore ensures that even if companies are unable or unwilling to spend on corporate health, prevention projects can still be implemented.

To summarise ...

In times of crisis, it may seem necessary to cut the budget for occupational health management. However, our experience shows that it is perfectly possible to provide an attractive and effective health programme even in financially challenging times. By focussing on the most important measures, regularly reviewing the effectiveness of your health offerings and using data, you can make the best decisions and achieve positive long-term effects. There are also numerous external support services that you can utilise to ease the burden on your budget. So there are plenty of strategies to ensure that OHM doesn't fall by the wayside, even in times of crisis.

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