Climate-related health challenges are driving up employer spending, and a new tool built by Mercer aims to help firms anticipate the potential costs.
The Climate Health Cost Forecaster was developed in partnership with the National Commission on Climate and Workforce Health. It seeks to arm employers with the data necessary to estimate the long-term health costs tied to weather events like extreme heat, poor air quality, flooding and hurricanes.
The tool is designed to offer companies a local perspective on the vulnerabilities that could impact their workforces. It leans on a combination of Mercer's proprietary models for healthcare costs and key weather and epidemiological research, according to an announcement.
Susan Potter, Mercer's U.S. and Canada president and the commission's co-chair, said in the release that 77% of workers have reported that extreme weather has effected them, but a mere 4% of employers have assessed which are at the greatest risk.
"The Forecaster connects the dots between extreme weather, people risk and rising healthcare costs," Potter said. "It empowers business leaders to prioritize employee health and turn risk into readiness.”
Through the forecaster, Mercer has found that employees working in climate-controlled environments have healthcare costs that are 40% lower than the average. The risks are especially pronounced in certain industries such as agriculture, utilities and construction.
The tool is one of the latest initiatives launched by the Health Action Alliance (HAA), which backs the commission alongside Mercer and support from Elevance Health and The Hartford. It seeks to unite businesses, public health experts and sustainability leaders to engage with employers around the health risks associated with climate change.
"We’re proud to launch an innovative solution that brings the financial impact of extreme weather on workforce health into focus," David Leathers, the HAA’s climate and health program director, said in the release. "With billion-dollar disasters accelerating—and hurricane and wildfire season around the corner—this couldn’t be more timely.”
Tracy Watts, Mercer’s U.S. leader for healthcare policy, said in the announcement that employers may find the forecaster's results "surprising."
For example, she said the top challenge in Portland, Oregon, is air quality for employers in all industries, while those operating in Burlington, Vermont, or Hartford, Connecticut, should brace for extreme heat.
"Of course, the results may fluctuate widely depending on an employer’s industry and the portion of their workforce in a climate-controlled environment," Watts said. "Still, they illustrate the importance of knowing the risks in the locations where you do business."
“You have to know the risk to address the risk," she said.