Health care costs more in Arabian Gulf

A survey by Mercer Marsh Benefits found that health insurance in the Arabian Gulf cost companies 6 per cent of payroll.

Healthcare provision is slightly more expensive in the UAE compared with other countries in the Middle East. Silvia Razgova / The National

The cost of providing health benefits to employees in the Arabian Gulf is considerably higher than in Europe, Africa and elsewhere in the Middle East, according to a new report.

A survey by Mercer Marsh Benefits found that health insurance in the Gulf cost companies 6 per cent of payroll, compared with 3.9 per cent in eastern Europe and 3.3 per cent in western Europe.

“There are a number of reasons for that,” said Steve Clements, the employee health and benefits leader for the Middle East at Mercer. “In this region it’s typical that employers will offer very comprehensive healthcare benefits because of the expat population that exists here.”

In addition, particularly in western Europe, the health systems are predominantly government-run, so employers are paying for top-ups as opposed to shouldering the full cost of health costs.

Health care in the Gulf is also expanding quickly, with modern hospitals opening up with the capability to treat complex conditions.

A key reason for care in the Gulf costing more is put down to the lack of a “gatekeeper”.

“You don’t have to go through a family doctor or any form of gatekeeper to access health care in the system. When you have some symptoms of a problem, you can go along to your local clinic or your local hospital and you are into the system very quickly and you can start to receive multiple tests and consultations, which will increase the cost of the healthcare plan,” said Mr Clements.

In addition, lifestyle factors and prevalance of conditions such as diabetes and obesity combine to affect the cost of health care.

Health provision is slightly more expensive in the UAE compared with other countries in the Middle East, partly because western expatriates in particular expect a high level of care. That has tended to result in higher costs to companies because health care is more available here.

But the outlay is worth it, said Mr Clements.

“There is a lot of research around the world that shows that providing good healthcare benefits result in a much more engaged workforce, so it increases employee morale,” he said.

“It leads to much higher rates of motivation, which can in turn result in higher productivity for the organisation, but more importantly, a healthier workforce will have lower rates of sickness absenteeism. They are going to be more present at work and they will be more productive when they are at work. And the kind of healthcare claims they are going to make will be less frequent and less expensive.”

The percentage cost of health costs versus payroll may seem expensive here, but it is comparatively less than half of the United States, where a similar study found that companies spend 13 per cent of payroll costs on health benefits.