IHC newsletter, Issue 20, July 2016
Editor’s letter
Welcome to IHC’s summer newsletter.
It’s easy to confuse the news with a political drama these days, each episode bringing new surprises and leaving the audience on tenterhooks. What will happen next?
Of course, as the story continues to unfold, it is too soon to know exactly how the Brexit vote will affect matters such as healthcare and the financial services. But it is important to keep our heads, and at IHC we are dedicated to doing the best we can for our customers whatever is happening in the wider world.
Away from the referendum, the medical insurance industry is changing. We are seeing significant moves from the major players to provide a more holistic approach, helping to improve wellbeing and health in the country’s workplaces. Find out more about the evolution of the industry and the value that is being added – going far beyond the traditional remit of insurance.
A round up of the news over the past six months offers a reminder that at IHC and across the industry, things are moving fast, services are improving and more is being done to ensure that employers and their staff are getting the best benefits at the right price. A competitive industry means you may have a lot of decisions to make. We want to be there to guide you through them.
We hope you will find our news letter interesting and informative, and as ever we welcome any feedback you may have.
Paul Roberts
proberts@ihc.co.uk
Industry news
IPT increases – the industry reaction
The Chancellor’s announcement in his March budget to increase insurance premium tax (IPT) to 10% from October 2016, got a fairly scathing response from the insurance industry.
Stuart Scullion, chairman of the Association of Medical Insurers and Intermediaries (AMII) said: “Although Insurance Premium Tax will only increase by 0.5 per cent, we are disappointed to note how this tax will impact on private medical insurance as well as cash plans, and subsequently the National Health Service (NHS).”
He added: “We do believe more support is needed to improve flood defences in the UK and we express great sympathy for those who have been affected by the flooding. However, it does not make sense to fund this through penalising those people who are choosing to prioritise their health through private medical insurance and health cash plans.”
The increase was the second in six months, and AMII said it would be a “double hit” for employees in companies with health insurance or cash plan benefits. “These employees will effectively be taxed twice and, rather than incentivising employers to offer health benefits to staff, this will further discourage this type of support and increase the burden on the NHS,” Scullion said.
In April, Health Insurance Daily reported that Scullion, speaking at the trade bodies annual meeting, had called on members to “work together to make a difference.” Health Insurance Daily quoted Scullion: “There are a number of issues we need to tackle head on, the obvious one being the recent increases in IPT, and a consolidated, concerted approach is now needed to address these and subsequently shape our industry.”
Lloyd’s chief seeks to reassure following Brexit
The financial services industry has been shaken by the referendum result, with share prices and currency taking a direct hit. Lloyd’s, Londons’ insurance market, was extremely vocal in its view that the UK’s place should be within the EU prior to the vote but following the result it must seek to reassure.
Lloydslist.com quoted Lloyd’s chairman John Nelson saying: “Lloyd’s has a well prepared contingency plan in place and Lloyd’s will be fully equipped to operate in the new environment.”
He continued: “For the next two years our business is unchanged. I am confident that Lloyd’s will stay at the centre of the global specialist insurance and reinsurance sector, and I look forward to continuing our valuable relationship with our European partners.”
Insurance giants also sought to offer reassurance. Aviva issued a statement following the referendum vote saying the Brexit would: “Have no significant operational impact on the company. Aviva’s operations in the UK and its other subsidiaries in the EU are well capitalised and continue to trade as normal.”
BMI: boosting investment at the Alex
BMI has announced an impressive £8m investment programme in its flagship hospital The Alexandra, known as The Alex, in Greater Manchester. The programme, to be rolled out over six months, will be spent on an additional MRI scanner, refurbishments in reception and the outpatients department, a new theatre where state of the art imaging equipment will be used and other equipment for the hospital’s seven operating theatres.
The Alex in Cheadle is BMI Healthcare’s flagship hospital and is the largest private hospital outside London. It has 600 staff and 600 consultants and treats more than 20,000 patients a year.
Simon Shepherd, executive director at The Alex, said the cash injections would ensure the hospital remains at the forefront of private healthcare in the region. He added: “This is the latest phase of a long-running programme of investment which will ensure The Alex maintains its position as the best-equipped private hospital in the region, delivering exceptional care to our patients with the very latest technology and even greater flexibility.
“This investment programme demonstrates the board’s great faith in the hospital and the exceptional team we are fortunate to have in place at The Alex.”
Editorial 1 – The Brexit effect
We are waiting to see just what impact the vote to leave the European Union will have on UK business. And perhaps that is not so surprising, after all it appears the business community, along with many others, did not expect the result we saw.
Jelf Employee Benefits published a survey on the preparedness of UK businesses from the perspective of HR and finance professionals in May, ahead of the vote. The results showed that only 2% had plans in place in case there was an exit vote, while some 61% of those questioned said their organisations had not formally considered the impact, and 11% had begun to consider the impact but had not yet undertaken any planning.
Planning for something that is so uncertain and which depends so much on negotiations that have not yet taken place is, of course, a difficult thing, and UK companies must now continue to wait to find out how they are affected and what measures they will put into place.
And in healthcare, too, there is something of a waiting game happening. There is a question mark over possible changes to funding of the NHS, especially as key Leave campaigners have since distanced themselves from the promise of £350 million for healthcare displayed on the side of the Leave campaign bus.
“We don’t yet know whether health and social care will get more funding or less,” says Paul Roberts, consultant at IHC. “If there is more funding, there are questions around problems of getting staff to fulfil those jobs, and whether this will filter in to result in shorter queues and better healthcare. If there is less funding, there is likely to be a greater need to consider income protection and ensure you have cover in case jobs are at risk, for example.”
Aside from funding, many warn that things will be tough for the NHS on numerous levels, particularly in terms of staffing. Following the vote, the BBC reported that there were 130,000 EU health and care workers in the UK, including 10% of doctors and 5% of nurses, according to the NHS Confederation, an organisation representing health managers.
Elisabetta Zanon, director of the Confederation’s European office, told the BBC: “There is a real risk the uncertainty and the falling value of the pound will make people think again. If that happens, we could see shortages in some key areas get worse.”
There are questions, too, around cross-border cooperation in terms of medical research and other areas, negotiations around reciprocal agreements with EU member states. The European Health Insurance Card (EHIC) service remains valid for now, and people can continue to apply for and use the cards as they did before the referendum vote. But what will happen should the UK follow through and leave the EU is as yet unclear.
There are plenty of other questions still to be answered. As we find out more in the coming months, we will continue to keep our clients informed about how they are affected and what action made need to be taken. For more information, contact Paul on proberts@ihc.co.uk
Editorial 2 – Product in focus: AccessHEALTH
AcessHEALTH is designed to help businesses provide valuable health benefits to employees who do not have private medical insurance. Focusing on prevention and early intervention, AccessHEALTH is not private healthcare insurance.
The product concentrates on the four main issues that affect corporate employee health, so that the investment in healthcare that business make goes directly to where it will make the most difference to employees’ lives. These key issues are mental health, musculoskeletal issues, lifestyle and access to GP services.
While it is not medical insurance, it does offer easy direct access to expert healthcare. The aim is to use technology and face-to-face services to allow people to get help with health and wellbeing requirements when they are needed.
AXA PPP said that those companies that do offer health cover only do so for 20% of their workforce. AccessHEALTH is designed to offer support to those who are not covered.
Chris Horlick, distribution director at AXA PPP healthcare, said: “For organisations who want to safeguard their employees’ health but are unable to provide full medical insurance for the whole workforce, AccessHEALTH provides cost-effective access to expert healthcare without any delays and engages people in their own wellbeing.
“As well as bringing a highly valued benefit to workers who, ordinarily, would not have the benefit of company-paid medical insurance cover, AccessHEALTH will help employers to keep their workforce active and healthy and, if they should become ill or injured, provide early access to investigation and treatment of the two biggest causes of sickness absence – musculoskeletal conditions and psychological issues.”
Paul Roberts, consultant at IHC, said: “AccessHEALTH is affordable and provides a welcome bridge between health cover and no cover. It’s a first step to offering valuable support to staff. That first step is not as big as business may think.”
Editorial 3 – Adding value: the insurers who give more back
Insurance has historically only been worth something to customers when they run into a problem. You pay your premiums, and you hope you don’t need to claim on them. But the private medical insurance (PMI) industry is changing. As well as supporting customers when something goes wrong with their health, they are helping and encouraging them to do what they can to stay healthy.
Unum, for example, has been behind a campaign to encourage employers to become ‘Caring companies,’ ensuring their staff’s wellbeing is a priority. A survey carried out by Unum in 2014 showed that caring for employees was a skill that was sorely lacking in UK companies – a third of workers said they were “adequately or poorly” cared for by their employers, while one in five said they felt levels of wellbeing had got worse in the last three years.
On that basis, then, something needs to be done to improve workplaces and make them healthier environments for all concerned. It’s no secret that having a healthy, happy workforce enhances businesses, making them not only better places to work but potentially improving productivity too. “A company that cares for its staff will be an employer of choice – driving recruitment, retention and productivity – and in turn, boosting growth for the business,” Unum says.
Unum developed a Blueprint for caring companies by working with a number of corporations and start ups to encourage employers to focus on health and wellness at board level, with practical advice and steps to be taken to make the workplace a good place for staff’s health and wellbeing.
The Blueprint focuses on five key areas of business where a real difference could be seen:
- Leadership and line management
- A caring culture
- Working practices
- Getting the employee benefits balance right?
- Protecting your business for the future
Outlining ideas and looking at how to put them into practice, it aims to help businesses make real changes to the way they work. And this is surely beyond the traditional remit of an insurance firm.
Bupa, too, is focussing on offering more through Bupa Boost, which it describes as a “health benefit that extends beyond the workplace”. “As well as inspiring your employees to become healthier, it can help you identify the key health concerns affecting your business,” says Bupa.
Bupa Boost, a smartphone app, is promoted as a “mobile health and wellbeing solution,” and it encompasses four main areas, mindfulness, relaxation, nutrition and fitness. Boost allows people to set personal goals for health and fitness, track their progress and enter into healthy competition with other employees. It can be linked to various running, cycling and activity-logging apps as well as wearable technology, and it converts the information it gathers on these activities and other aspects of lifestyle into ‘Wellness Points,’ giving an overall picture of an individual’s health and fitness.
The emphasis, then, is not just on prevention rather than cure but on a holistic approach to wellbeing that was not traditionally part of the insurer’s job. “Insurers are adding value all over the place, it is part of an overall trend in a changing industry,” says Paul Roberts, consultant at IHC. “Put frankly, insurance tends to kick in when you are ill, injured or dead. But these groups are making a move to engage with their customers and before those things happen – and perhaps even helping to prevent them from happening.”
To find out more about how these services can help your business, contact Paul on proberts@ihc.co.uk
A review of the past six months
In this section, we take a look at some of the stories we at IHC have covered over the past six months. It has been a busy time for the industry, with plenty to discuss, and here we round-up articles on some of the key issues affecting our industry.
Step to it…
We kicked off the year with a challenge at IHC. We know a fit workforce is a happy workforce and, to help our team stay healthy, we gave each member a Fitbit and offered a prize for the first person to walk the equivalent of the distance between our Callington, Cornwall and Billericay, Essex offices – some 710,000 steps or 333 miles. Find out more.
Workplace stress – the problem that won’t go away
Mental health continues to represent one of the greatest challenges to business. Stress in particular is a problem at all levels of company hierarchy, and the pressure to work long hours is making matters worse. According to a Chartered Management Institute (CMI) study reported on the Employee Benefits website, more than half of managers responding said that working hours were having a negative impact on their levels of stress. Find out more.
The international question
According to Aon Hewitt, the average costs for global employer-funded medical plans are anticipated to grow by 9.1% this year – choosing skilled negotiators and expert brokers is becoming increasingly important when navigating the world of international private medical insurance. Discover how we can help.
The Budget: IPT increases
The Chancellor’s 2016 Budget turned out a few headline-makers, but somewhere further down the page is another tax increase which attracted less attention. The chancellor increased the rate of insurance premium tax (IPT) to 10%, up 0.5% on the present rate. Find out how to ensure your cover remains at the right price.
State of the art health institute opens its doors
After six years of planning and research, the Manchester Institute of Health and Performance opened for business. The Institute is the result of £18m investment, and aims to provide a world-class environment for diagnosis, education and research in health and performance. It is the first of its kind in the UK, and was developed in partnership with Manchester City Council, Sport England and City Football Group. HCA Healthcare UK, part of the world’s largest private hospital group, has been brought in to operate the facility. Find out more.
Wearable tech – where next?
Wearable devices connect with smartphone apps to allow the user to track their activity – the number of steps taken, floors climbed, calories burned, how long and how well you are sleeping. The information is sent to the app so that you can get a snapshot of how active you are – or a wake up call showing how inactive. We take a look at some of the key devices and explain how IHC is making use of the technology for the wellbeing of our staff. Find out more.
AXA PPP: changes in the Channel Islands
For years, AXA PPP lead the way in the Channel Islands with a one-size-fits all approach that made cover simple, if a little unimaginative. Things have now changed. Partly, the changes to the policy are in response to suggestions that AXA PPP should push the boundaries more in its cover in this area. Partly, they are related to the firm’s acquisition of Simply Health, which led it to revise its products to match the level of cover on offer to its customers. Whatever the reasons, AXA PPP’s offering has become more innovative, more varied and, perhaps inevitably, more complicated. Find out more.
Slipping through the safety net
Research published by Legal & General has shown that British employees could be relying too heavily on safety nets which are less comprehensive than they believe them to be. According to a survey carried out by the insurer, workers believe that they would be offered far more financial support should they fall ill than they would actually receive. Find out more.
The sandwich generation
As the population ages, the so-called sandwich generation is finding itself well and truly squeezed in the middle, keeping careers on track while ensuring they do their best for their loved ones, young and old. Caring for your own children, and even grandchildren, while looking after the needs of ageing relatives too, can be a difficult balance to strike. Find out more.