With employers placing greater emphasis on maintaining employee health and wellbeing, Steve Langan explains how the right advice is vital when introducing a comprehensive healthcare strategy.
The medical insurance market has witnessed a change in attitude towards employee health and wellbeing of late, not least among the hierarchy of UK PLC. Recent trends in the US have shown that employers are increasingly providing a broader range of healthcare benefits and preventative health services to their staff - and this approach is now starting to be mirrored in the UK.
In addition, UK employers are demanding more than just price comparison broking from their insurance intermediaries. Calls for genuine professional consultancy and added-value services from brokers have been gathering momentum within the insurance industry as a whole, and the potential benefits of this for employee healthcare are considerable.
US studies have shown that initiatives to improve lifestyle, coupled with health screening, have had a positive impact on reducing business costs by improving productivity and slashing absenteeism. Corporate America has embraced integrated programmes to manage and promote employee health, rather than a random selection of perks, and the number of enlightened companies in the UK is also on the rise.
There is still some way to go, however, and employers should be looking to introduce, sooner rather than later, a long-term healthcare strategy that will benefit not only their staff but also their bottom line.
Health insurance intermediaries have a major role to play in this field, but unfortunately many do not have the experience and breadth of knowledge to offer comprehensive private medical insurance (PMI) and healthcare consultancy. In many cases, PMI is adopted by general insurance brokers as a peripheral, albeit complementary, offering and is regarded as simply a means for them to boost their revenue streams.
Advising on Programmes
Appropriate high-level consultancy involves carrying out comprehensive health risk and insurance reviews to advise upon how best to provide a holistic and integrated employee benefits and healthcare programme.
The key difference between a broker and a skilled consultant is that the broker will select one small element of an employer's health package - the medical insurance scheme, for example - and conduct a market review. However, exclusively finding a lower insurance rate does not address the fundamental health issues affecting an employer's business, and the larger the company, the more of a problem this approach presents.
Companies, of course, will always want to reduce their premiums, even if their claims are rising. The broker will endeavour to achieve this, while the employer and the insurer will devise ways of reducing their liabilities - for example, putting in excesses and increasing the cost burden to employees. All the while, credible cost control solutions from intermediaries, such as case management services, remain few and far between.
There are some within the industry that have succeeded in developing effective initiatives. However, more industry-wide efforts can yet be made. Brokers have an obligation to reduce or stabilise the cost and volume of medical schemes on behalf of their clients, but skilled consultants will also advise on strategic health management programmes, such as early intervention initiatives.
From a recruitment perspective, for example, employers should be giving consideration to the potential risks they take on. Cost-effective pre-employment health checks can prove to be an extremely valuable tool for a successful recruitment process, but one that is all too frequently overlooked. The more progressive intermediaries may even be able to offer these assessments by virtue of having their own occupational health facilities and consultant physicians.
Generally, the more senior the member of staff, the more thorough the assessment will tend to be. A prospective executive, for example, may undergo a physical examination - including a variety of clinical and ECG tests - whereas a lower level appointment may simply require a paper-based assessment, such as a health and lifestyle questionnaire.
Recent developments
More recent developments in this market include online health assessments, devised by specialist providers such as Vielife and introduced by the likes of Bupa. These have been successfully exploited, not only by businesses keen to enhance their recruitment processes, but also by those wanting an overall picture of their employees' health and wellbeing.
Access to such information provides the cornerstone for the active management of employee health. Action plans can be generated to improve such variables as fitness, nutrition and sleep, and to tackle common health and workplace issues such as obesity and stress. Some employers have even been known to bring in specialists, such as counsellors, on site.
With the support of detailed medical management information, well-informed HR professionals are also in a better position to cost future employee health needs and plan accordingly.
In addition to pre-employment risk management, carefully constructed strategies to maintain healthy workforces will reap substantial rewards by improving productivity, reducing absence, increasing competitiveness and establishing businesses as employers of choice. With sickness absence costing UK business billions of pounds each year, and rising annually, the development of such strategies is vital.
Developing the PMI market
The role that PMI has to play as a valuable employee benefit is clear, and with the market remaining as competitive as ever, with relatively low level of year-on-year premium increases in relation to medical inflation, it continues to represent good value to the corporate market. When PMI is adopted as a stand-alone product, however, it can be justifiably seen from the employers' point of view to be a case of shutting the stable door after the horse has bolted.
Employee ill-health resulting in absence from the workplace remains a considerable business cost, but steps can be taken to mitigate it. For example, an effective absence management initiative may include employee assistance programmes and proactive stress management. This cannot only help minimise absenteeism, and in some cases income protection claims, but also help to safeguard against the threat of prospective compensation claims.
This initiative could then be complemented with an automated or voice-activated absence recording system, taking the pressure off HR departments and enabling them to respond quicker in helping staff return to work.
At boardroom level, there is now a greater appreciation of the role that good health management has to play in business development, but ultimately all company stakeholders must have a common understanding of what the requirements are within the company.
Act as a catalyst
Wherever possible, brokers should be setting out to act as a catalyst for bringing together those within a business who are responsible for operations such as occupational health, human resources, compensation and benefits and purchasing and finance. Providers will also frequently introduce to the table the knowledge and expertise of an occupational health physician to help clients shape their strategy.
Shared information and open communication ensures all respective parties are working towards a consistent set of goals. There is a very real danger of imprudent decisions being taken by managers or directors when they are made in isolation from their colleagues.
A revolution in the corporate medical market may be too much to ask for, but the fact that evolution from short-term solutions to strategic risk management is well underway, is cause for considerable optimism in the face of the demands on today's workforces. n
Steve Langan is group sales director at PMI Health Group
