Medihelp finance head Henrie Nieuwoudt - Rising chronic disease, ageing workforce and mental health drive South Africa healthcare costs — employers must partner with schemes and prioritise prevention

Factors driving healthcare costs

For businesses, it helps to understand why healthcare costs continue to rise. Henrie Nieuwoudt, head of finance at Medihelp discusses some of the main cost drivers, their impact on employers, and strategies to manage them.

First is South Africa’s growing chronic disease burden. Conditions such as diabetes, hypertension, obesity, and cardiovascular disease are increasing in prevalence, with many instances being lifestyle-related or preventable.

The International Diabetes Federation estimates that South Africa had more than 2,3 million adults with diabetes as of November 2025, with a high proportion undiagnosed. When people don’t keep an eye on important health indicators such as their blood pressure, cholesterol, or glucose levels, health risks or problems may go unnoticed. By the time they seek treatment, a condition may already be advanced and more expensive to manage.

A second key factor is an ageing workforce. As employees get older, their healthcare needs naturally become more complex. At the same time, the younger workforce entering the market is not doing so fast enough to balance that risk profile. This places pressure on employer groups, medical schemes, and benefit structures.

Mental health is another major contributor. “We are seeing more strain on people’s emotional well-being, influenced by work pressure, financial stress, and the always-on nature of modern life. The rise in social media has also played a role. While it can foster connection, it can also contribute to anxiety, depression, and low self-esteem,” he says, referring to a study by UC Davis Health.

The impact on employers is significant: absenteeism, presenteeism, and low engagement. An employee may be physically present, but if they are struggling mentally or physically, they are unlikely to be fully productive when it comes to tackling their workload.

Then there is medical technology. Advances in robotics, biologics, diagnostics, and specialist treatments are improving patient outcomes, which is positive. But innovation also comes at a cost. Hospitals and providers may invest heavily in new technology and research, but these costs will eventually flow through the healthcare system.

Beyond a line item to improved employee well-being

This is why businesses should not view healthcare purely as a cost item. According to Henrie, a cheaper plan may look attractive on paper, but if it does not support holistic employee health properly, the business may pay more elsewhere through lost productivity, extended sick leave, disengagement, and unmanaged chronic conditions.

The real question is not “What are we paying for medical aid?” but “What is poor employee health costing the business, and how is our medical scheme helping us address it?”

Partnering strategically with your medical scheme

One practical step is to partner more strategically with a medical scheme. “At Medihelp, for example, disease risk management is not simply about paying claims. It’s about helping members stay engaged with their treatment plans,” he says. If someone has hypertension, are they taking their medication? Is their condition being monitored? Are they receiving the right guidance and support before the issue becomes a major event that could keep them away from work for weeks or months?

For employer groups, anonymised workforce data can identify important trends. “If mental health claims or chronic disease patterns are increasing within a group, the business can respond with wellness days, screenings, targeted education, or practitioner support – while still protecting individual confidentiality. This turns healthcare cover into a partnership rather than a passive monthly expense.”

Choosing an appropriate plan

Additionally, not every employee needs the highest-tier option. Younger, healthier employees may be better suited to a more affordable hospital or network plan, while older employees or those with chronic conditions may need richer day-to-day or chronic benefits. Corporate solutions such as Medihelp’s MedReach, a cost-effective network medical aid option for professionals, businesses, and employer groups, can help companies balance affordability with access to private healthcare through designated networks.

The importance of preventive care

Preventive healthcare is one of the strongest cost-control tools available. The earlier you intervene in the healthcare journey, the lower the long-term cost is likely to be. Encouraging employees to ‘know their numbers’ is simple, yet powerful. Screenings for blood pressure, cholesterol and glucose, offered at the workplace on a regular basis, can identify risks early – before it turns into a major claim or a long absence.

Wellness initiatives also need to be practical and engaging. People are more likely to participate when the experience is simple, rewarding, and relevant to their daily lives. Tools that include healthy recipes, exercise programmes, educational content, meditation support, and gamified incentives can help build healthier habits over time. “We are currently trialling the Fitt app with our employees before making it available more broadly beyond the Medihelp workforce.” Even small lifestyle changes, repeated consistently, can reduce risk, Henrie adds.

Remember to make it a long-term investment

From a financial perspective, this CA(SA) and CIMA-qualified professional believes healthcare planning should be part of broader workforce risk management. “Businesses that invest in prevention, appropriate plan selection, and active employee well-being are not only managing medical aid spend, they are protecting productivity, culture, and long-term economic sustainability.”

On a personal level, Henrie believes that reducing healthcare costs starts with making healthier lifestyle choices. “Movement matters. I try to exercise every day, whether that is weight training, running, or another form of physical activity.”

He doesn’t believe you have to push yourself to the limit every day, though. Rather, his advice is to find something you enjoy and do it consistently. “For businesses, the principle is the same. Sustainable healthcare cost management starts with consistent, preventive action – long before a claim is even submitted.”