In times of sky-rocketing health costs, employers expect benefit programs to deliver measurable outcomes.

As Chief Broking Officer, Global Benefits Health Solutions at Aon, Douglas Ries is responsible for the development, planning and implementation of the broking strategy for Aon’s multinational Health & Benefits clients. During his visit to our Munich office, I had the chance to interview him about the current market dynamics concerning the provision of good healthcare benefits to employees. Furthermore, he shares his view on how insurance networks may support multinationals in controlling healthcare costs and what he enjoys most about his role - happy reading!

Providing good healthcare benefits to employees comes with several challenges. Douglas Ries identifies four key areas: Cost & affordability, productivity, user experience and alignment with sustainability practices.

Looking at cost and affordability, Aon projects that medical costs will rise globally by 10.1% in 2024, the highest annual increase since 2015 (Source: The Global Medical Trend Rates Report 2024). In this environment of inflation from medical rates and cost of care, both leading to sky-rocketing health costs, brokers are often approached by employers with the question of how to optimize their benefit spend. This concerns the question of how to get the best return in investment on a specific amount of money spent for a benefit package or service. “Because what we think is important as an employer, even as a broker or an insurance carrier may not actually be important for the employee,” he said. The challenge, aside the individual cost itself, is to understand what employees really want and how to allocate limited budgets to the right benefits areas.

From a productivity standpoint, the key challenge is to minimize the knock-on effects of poor health of employees, such as lack of productivity in the workplace due to absenteeism of the individuals as well as the impact on colleagues who must then compensate through extra work.

For benefits to be effective, they must be well received by the end users. To enhance the employees’ engagement with the benefits offered, Douglas Ries and his team advise companies on how to best deliver the benefits, or in other words, how to enhance the overall user experience through technology, educational trainings, or individual personal engagement.

Finally, there has been an increased interest from the market to integrate sustainability into benefits programs. Many companies are demonstrating their commitment to creating a positive impact on both the environment and their workforce with set ESG targets over the coming years. Thus, they are seeking to work with partners, whether it be consultants, brokers or carriers that are committed to the same sustainability practices to help them reinforce and achieve the goals they want to see in this area.

According to Aon, health and benefits insurers are responding to these challenges with increased flexibility around plan designs and programs. Understanding the cost driving factors and implementing cost containment practices are key elements in reacting to the market dynamics. Several cost-effective mitigation measures, such as wellbeing initiatives, preventative medicine initiatives and encouragement for a healthy lifestyle, have found to be better integrated within benefit programs. The partnership of employers with an insurance network ensures that these measures are part of a seamless user experience, and that they sit side by side with a health policy without being an administrative burden. “From a consultant standpoint, it is our role to help clients navigate through the large choice of available services and ensure that they are connected to the best solutions to complement their core insurance program,” said Douglas Ries.

To best support multinationals in controlling their healthcare costs, it is important to identify the value and the return of their implemented benefit programs. The money allocated to these programs need to deliver measurable outcome, such as lower costs, lower claims frequency or enhanced terms and conditions. The key here is to understand what is driving the claims activity, stressing the importance of employers, consultants and insurance networks being collaborative partners in data exchange, transparency, and cost mitigation practices, thus delivering insights to drive better decisions.

This is what Douglas Ries enjoys most in his role – engaging with people all around the world who have the common intention of bettering the health and welfare of their clients’ employees. With a focus on optimizing the plan design, financing, and administration of multinational benefit programs, “I get to be the voice and true advocate on behalf of our clients,” he shared. “I can experience at first-hand how great new ideas come together to help our clients solve their problems."

Expert Talk - Doug Ries (Aon)