The past few years have seen calls for product innovation in corporate markets. Unfortunately, none of these new developments have really taken off. Stuart Shaw calls for a different approach.
Employers need to take greater control of lifestyle-oriented risk, and insurers need to find a way of recognising this early on, such that it can be reflected in scheme design and premiums. What is required is more prevention and less cure, and that is a challenge.
To what extent can a business demand an employee improve their lifestyle? Can you only nudge, or could you, and should you be, more prescriptive? Importantly, any discussions of this nature need to also include the insurers and health service providers to understand what assistance they may already be able to offer.
Product innovation has not been without success stories. We have seen some interesting products come out, as cash plan providers such as Westfield have started providing cover for some hospital treatments.
BUPA also has a range of lower-cost products that include diagnosis-only, or treatment-only products, and a scheme that is specifically designed to address mental health and musculoskeletal problems.
AXA has a self-pay plan, which allows employers to access treatment for individuals with musculoskeletal or mental health conditions that have caused absence.
The impending tax exemption for low-cost treatments for employees who have been absent for four weeks may make such products seem more attractive to employers and employees.
While none of these products have yet gained huge traction, clients and prospects are now telling us that they are willing to try something different. It is time to really understand the pros and cons of these new products and to discuss them with clients.
Another interesting development is the fact that public-sector employees now increasingly phone third parties, rather than their employer, when calling in sick. Outsourced absence management has been available for some time, but it is less common in the UK private sector. It is more common in the US, and we do often adopt their practices some years later.
Some GIP insurers offer helplines that can assist with management and rehabilitation. It is easy to see how they might also be used to steer employees through the other products and services provided by or through the employer.
In the US, where short-term disability products are also more common, the agency that takes the first absence call may manage everything to do with that absence, including all insurances and any interventions.
Health and Work Service
In the UK, we have absence monitoring software, absence management firms, occupational health practices, HR providers, PMI and GIP insurers working independently of each other. We will soon see the launch of the Health and Work Service, which may either offer further help or perhaps further confusion and conflict.
Perhaps some employers would now welcome these triage services, as long as they can be offered at a price that is proportionate to the absence and claims management results. As always, the metrics are critical and employers are acutely aware of a need to get a return on investment. Providers need to offer solutions, and meaningful data about their use and impact.
In many cases, the board of a company will monitor absence on a percentage basis. The providers need to show that they can reduce this absence. Sometimes, even a small percentage reduction can mean hundreds or even thousands of days or shifts, which can have a real impact on productivity.
Linking that positive impact with a reduction in the costs of PMI and group risk claims could be reason enough to invest in new products, and offer benefits to more employees.
Stuart Shaw is principal consultant at Xafinity
