Cost of the Indian companies providing healthcare cover to their employees are grappling with an average of 10 per cent rise in premiums over the last three years, a survey said.

The reasons for this are emergence of new medical technologies and over-ecommendation of services, a Watson Wyatt survey said.

“In 45 per cent of the cases observed, major reasons for rise in premium was advent of sophisticated medical technologies and malpractices like over-recommendation of services,” the survey said.

Watson Wyatt is a global, multi-practice consulting firm specialising in insurance and financial services, human consulting and employee benefits.

The rising premiums, have, however, not affected the importance Indian corporates pay to health-care cover in their hiring and retention plans, it said.

“Forty one per cent of the companies observed use health-care cover as a talent attraction and retention tool, while 11 per cent use it to minimise work loss,” the survey said.

A significant finding of the survey is that in spite of rising premium costs, economic turbulence and the difficulty in maintaining an affordable health-care cover, 62 per cent of the companies observed did not reduce any premium costs out of employees salary.

“Over 54 per cent of those observed, do not plan to share it with the employees even in the coming year,” it added.

Rising health-care costs are making corporates strive to strike a balance between increasing premium costs and retaining their attraction for the right kind of talent.

“To achieve this objective, it is crucial that companies are constantly reviewing and customising their health-care plans. It is vital that employers design an appropriate plan, employ efficient ways to manage it and ensure that employees understand its value,” the Watson Wyatt survey said.

Though health-care costs have increased due to medical inflation, increased competition in the stand-alone health insurance space will put downward pressure on premium costs, it added.