Tania Joffe discusses the financial realities facing the South African workforce and challenges businesses/employers to intervene. She asserts that in taking care of their employees’ health, they better guarantee the growth and overall health of their businesses.
While loadshedding and rising inflation are putting pressure on South Africa’s businesses, there’s a third challenge to operational success in the form of employee health. Up to 15% of South Africa’s workforce—2.25 million people—are on sick leave on any given day. Millions more are victims of ‘presenteeism’—employees at work, but not delivering due to being physically sick, stressed or burnt out. It is estimated that South African businesses are losing up to 17% of their annual payroll to absenteeism, costing our economy around R19 billion each year
The reality is that employee health and employee productivity are mutually inclusive: a mentally and physically healthy staff member is more optimistic, more creative, and more motivated—but maintaining their own health and the health of those they are financially responsible for puts a huge burden on South African employees. Statistics South Africa’s 2022 General Household Survey revealed that 41% of the country’s 18 million households comprise four or more people. 42% of those households are double-generation households, 23% single person, and 14% triple generation, where two or more adult generations live under one roof. The household composition means that many extended families are forced to rely on a solitary income—and that the breadwinner in a home may also be solely responsible for managing the health of everyone in it, including taking time off work to visit doctors and hospitals, with them.
Medical aids remain inaccessible to most South Africans
Stats SA research shows that South Africa’s private medical aid ecosystem does not currently service the needs of 82% of the population—and the 50 million people who access healthcare through government facilities are often underserved due to the overwhelming demand and limited resources in place to meet this demand. Because most of the population cannot access quality healthcare easily, illnesses are often undiagnosed—and if diagnosed, untreated for financial or access reasons.
South Africans have a 51.9% chance of dying from a non-communicable disease (NCD). The main types of NCD are cardiovascular diseases (such as heart attacks and stroke), cancers, chronic respiratory diseases (such as chronic obstructive pulmonary disease and asthma), and diabetes.
When non-communicable diseases are detected early, simple interventions through changes of daily habits may reduce the risk factors and prevent the need for costly medical intervention at later stages. The SA Heart Foundation indicates that as many as 80% of premature deaths in South Africa can be prevented with a healthy diet, regular exercise, and avoiding smoking. One in nine people in South Africa is living with diabetes and ranks 25th worldwide for asthma prevalence and 5th in terms of asthmadeaths, with an estimated 18.5 deaths per 100 000 asthmacases. The management goal is ‘90/90/90’, which has been achieved with HIV—90% of cases are diagnosed, of which 90% should be on treatment, of which 90% are following treatment and in range. For diabetes, for example, the percentage of those diagnosed is closer to 20%.
These numbers are low because the early symptoms of non-communicable diseases are often not very debilitating and, given the friction attached to accessing quality care, these symptoms are ignored and risk reduction actions are not taken. The chronic and debilitating impact of compromised quality of life of those suffering from NCDs affects productivity, opportunity and, as a result, the extended family—besides the knock-on effects in the workplace and on the economy.
Stats SA’s quarterly employment survey (QES) for the first quarter of 2023 showed that the mean salary in SA is R27 100 per month—meaning 50% of those employed are earning below R27 100 per month. The minimum wage is R7 880 per month. Our data seems to indicate that people earning below R30 000 per month find it difficult to pay for private medical aid and therefore either pay out of pocket—estimated at R40 billion per annum—for private healthcare or use public health services. 1.1 million people have taken up a mix of private primary health insurance and hospital plans. The former is largely employer-co-funded, with the biggest sector being the security industry, where the bargaining counsels have played a key role. We’d like to see more sectors engage the various primary healthcare solutions in support of their staff having access to quality healthcare. The price point is very competitive, as more players are entering this space. Access to quality primary care is key, as it enables effective care of many acute conditions, as well as early diagnoses or risks related to chronic diseases. It will reduce the demand and burden of secondary and tertiary healthcare, which is far more costly.
Business intervention can improve employee healthcare and bottom-line outcomes
All this means employers can improve the lives of their employees and also see an impact on productivity through reduced absenteeism—a virtuous cycle that we believe all employers should consider.
Beyond the current increase in the available primary healthcare solutions in the market, technology may also play a key role in removing the friction of access, cost, and quality attached to healthcare. We believe that appropriately-leveraged technology can be a game-changer in redefining patient-centric healthcare. We are very excited by these developments and are testing applications in this space to see their usability, clinical integrity, and reliability, as well as commercial feasibility.
We are struck by the anomaly that, in the banking industry, customers expect to perform most of the services needed via their phone, yet healthcare still sees most of the services delivered in person, using paper files and records, with decision-making at the discretion of the attending healthcare practitioner—amidst a global shortage of these services. Health-tech is seeing significant global investment as a result of the opportunity to serve the demand not met by traditional healthcare models. African health-tech and biotech start-ups raised $392 million in funding in 2021 and, although that flattened in 2022, the Digital Health market in Africa is projected to grow by 15.42% between 2023 and 2027, resulting in a market volume of $10.42 billion by the end of that period.
With all these interventions geared towards the early diagnosis and management of NCDs and the better management of presenteeism, imagine what South African employers could achieve for the country by putting even half of the billions lost to presenteeism, back into the economy? Corporate South Africa can make the most of the financial opportunity to drive growth and help build the economy offered by taking responsibility for managing the health of the people who drive it—a rare opportunity to solve an expensive challenge with a humanitarian impact by simply caring enough.
Tania Joffe is the Principal of Unu Health and Head: Insurance Innovation at Standard Bank.