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By Aly S. Maherali
For businesses in Uganda, whether small and growing or more established and medium-sized, managing costs while investing in people and growth is a constant balancing act. Salaries and supplier payments need to be met, taxes and operating costs must be managed, and there is always pressure to invest in the next stage of the business. In this environment, employee medical cover can sometimes be viewed as an expense that can wait until the business is larger or revenues are stronger.
That thinking is understandable, but it can also be costly. For both small businesses building their teams and medium-sized businesses looking to retain and strengthen an established workforce, access to quality healthcare can be an important part of building a healthy, productive, and resilient organisation.
For a small and medium enterprise (SME), the illness of one employee can have consequences far beyond the individual. When teams are small, one person’s absence can affect an entire operation. A missed shift can mean a missed sale. A prolonged illness can put pressure on colleagues. When an employee delays treatment because they cannot afford it, a health problem that might have been addressed early can become a much more serious and expensive issue.
This is why employee healthcare deserves to be considered a business decision, not simply a staff benefit. Small and medium-sized businesses are an important part of Uganda’s private sector, which employs approximately 2.5 million people in formal jobs and accounts for 77 percent of formal employment. Uganda’s enterprise sector is also dominated by more than 1.1 million micro, small, and medium-sized enterprises, which collectively contribute around 80 percent of GDP and 80 percent of domestic revenues.
For businesses with established teams, the implications are significant. As companies grow, so does their reliance on a healthy, productive, and committed workforce. Employee medical cover can therefore be more than an additional benefit; it can be part of a broader strategy to attract and retain talent, reduce disruption when employees face health challenges, and build a more resilient business.
The people working in these businesses are therefore not just employees. They are the workforce behind a substantial part of Uganda’s economic activity. Yet many employees and their families remain exposed to significant healthcare costs. World Bank data show that out-of-pocket payments accounted for more than 32 percent of current health expenditure in Uganda in 2023. For a household operating on a monthly budget, an unexpected hospital admission, surgery, or prolonged illness can quickly become a financial crisis.
The result is often delayed care. An employee may postpone seeing a doctor, borrow money to pay for treatment, or continue working while unwell. None of these outcomes is good for the individual, and none is good for the employer.
For SMEs, the effect can be particularly pronounced because there is usually little room to absorb disruption. A larger company may be able to redistribute an employee’s workload across a department. A business with 10, 20 or 50 employees may not have that luxury. This is why SMEs should look at healthcare differently.
The question is not whether a business can afford the most comprehensive medical scheme, but whether its healthcare strategy is fit for the people it is seeking to attract, retain, and protect. For businesses with senior executives, expatriates, frequent travellers, or teams operating across borders, International Private Medical Insurance (IPMI) can offer a more appropriate solution, providing access to private healthcare across multiple countries and greater continuity of care beyond the employee’s home market.
Depending on the needs of the organization, an IPMI plan can incorporate outpatient and inpatient care, specialist consultations, preventive screening, mental health support, maternity benefits, medical emergency evacuation, new chronic condition management, and telemedicine. The right level of cover will ultimately depend on the profile of the workforce, the geographical footprint of the business, and the healthcare expectations of its key people.
Uganda’s low insurance penetration makes the opportunity even more significant. The Insurance Regulatory Authority has reported that health insurance remains underdeveloped, despite being among the fastest-growing classes of insurance business. For employers, this presents an opportunity to play a greater role in closing the healthcare financing gap. Group medical insurance can allow SMEs to pool risk and provide employees with access to care that may otherwise be difficult to afford individually.
For an SME competing with larger employers, salary is not always the only factor that determines whether someone joins or stays. Medical cover can provide employees with a sense of security and demonstrate that an employer is prepared to invest in their well-being. In a competitive labor market, that can make a meaningful difference.
Ultimately, the cost of healthcare should be weighed against the cost of poor health. Absenteeism, reduced productivity, employee turnover, and disruption to operations all carry a price, even when that price does not appear under a specific heading in the accounting balance sheets.
Uganda’s SMEs have an important role to play in creating jobs and driving economic growth. But businesses cannot grow sustainably without healthy, productive people. For Uganda’s SMEs, it is increasingly a practical investment in the people, productivity, and resilience that their businesses depend on.
