November 2013
Editor’s letter
Absence, it’s said, makes the heart grow fonder. But for countless businesses across the UK, it is more likely to cause a bit of a headache. As the nights draw in and the germs spread through public transport, schools and offices, so the season of sick leave begins. Last year, absence cost British business some £29bn, according to PwC.
It is a difficult element of company life to manage – poorly people trooping into the office makes matters worse, and genuine illness needs treatment and time to enable recovery. And when illness sees staff out of the workplace for longer periods, the strain on the employer can grow. Sick pay insurance can help. Unum’s Sick Pay Insurance, for example, can help with administration and cover sick pay from as early as the first week of absence, fitting in neatly with existing income protection plans. Find out more in out Spotlight feature.
And when illness does strike, knowing you are getting the very best care available is invaluable. Critical Advantage from Best Doctors gives you access to the very best medical practitioners in the world to give you a second opinion on a diagnosis and, if necessary, cover recommended treatments elsewhere in the world when the NHS or UK private healthcare providers can’t.
These are interesting times for healthcare benefits, and increasingly cost and flexibility are the two key elements in decision making. In our Podium feature, we discuss how healthcare trusts can provide both bespoke benefits and cost control.
And so I’d like to welcome you to this edition of IHC Insider. I hope you find it interesting and informative, and, as ever, we would love to hear from you with any questions of feedback.
Paul Roberts
Industry news
Healthcare? There’s an app for the
Smart phones are everywhere, and many people take advantage of the apps on offer to help them with their daily lives. From travel booking to theatre tickets, from children’s games to photo editing, the scope of the app world reaches far and wide.
As well as entertainment and consumer apps, there are a whole range of apps designed to help people stay healthy. There are diet apps to help you monitor calorie intake, fitness apps to motivate you and keep track of training. But there are also a huge number of apps designed to help with muscular-skeletal problems.
The Simplyhealth Back Care app allows users to record pain levels at different points in the day and offers an exercise plan to help people to control their back pain. You can find a back care practitioner if you need help and can read up on a wealth of information and advice to help keep back pain manageable.
The AXA Health Gateway app allows you to monitor your overall health and wellbeing, tracking what AXA PPP Healthcare calls the five Drivers of Wellbeing: health, fitness, nutrition, lifestyle and mindset. It provides you with a dashboard display so that you can get a clear picture of how you are living, how much time you are spending on certain activities, how well you are eating, your alcohol consumption, just about everything that can impact on your health.
“There are many apps offering help and support with health issues,” says IHC’s Paul Roberts. “They stretch from specific injuries through to more generic approaches. And although many people use smart phones all the time, a lot are just not aware that they have the capacity to help with health issues.”
Spotlight on… Absence – Easing the worry for business
As we head into the coldest months of the year, sickness and absence begins to play on the minds of British businesses. Flu, stomach bugs, coughs and colds are all, unfortunately, part of the winter landscape. But while absence through illness may be unavoidable in a lot of cases, some of the headaches it can cause are more easily alleviated.
Unum’s Sick Pay Insurance is one way of easing the pain of the unpredictable problem of absence. The cover aims to help employers spread the cost of absence with a monthly premium, and the insurer says the cost is not necessarily greater than what is already paid for sick staff members. The service includes claims management support, which helps firms to avoid inaccuracies and a lack of uniformity in the way managers register absence, and it can be used in conjunction with existing income protection plans.
Sick Pay Insurance can be modified to meet the needs of the company, with deferred periods from one to four weeks, payment periods stretching from 12 to 52 weeks. Companies can choose the size of the benefit on offer, setting a percentage of an employee’s earnings up to a maximum of £6,000 per month. It also includes a return to work programme that is designed to be safe and sustainable.
Marco Forato, chief marketing officer of Unum, said when the product was launched: “We are the UK market leader in long-term income protection, but our customers – particularly small and mid-size employers – have told us that short-term sickness absence is as much, or even a greater, concern to them.
“In response, we have developed SPI which helps employers to mitigate against the unanticipated sickness absence costs. Employees also benefit as they continue to receive a monthly income and have access to our industry-leading return to work expertise.”
“What is interesting about this is that it provides an unusual ‘gap’ product,” says Paul Roberts, consultant at IHC. “It ties in perfectly with existing schemes, it takes pressure off in terms of administration and it can kick in at week one if that is what the employer chooses.”
Case study – Managing the cost of time off
GMF & Co UK is the UK branch of a US law firm. The firm has 250 employees in its London office. Staff benefits included group income protection (GIP) paying from 26 weeks, and before 26 weeks staff qualified for full pay for a maximum of 10 days rolling over a 12-month period, with extra days at manager discretion.
Pay for sickness absence was costly. One solicitor was off sick for routine knee surgery, while another was involved in a traffic accident. With salary and discretionary sick pay combined with the costs of an interrupted workflow, administration and loss of productivity, sickness absence costs reached £9,000 for one month.
With the impact of these costs encouraging the firm to focus on the issue, the company decided to take out sickness absence insurance with Unum. They chose a complete absence management plan which dovetailed with their existing GIP plan. They opted for a two-week deferment period, a 24-week payment period and 75% salary replacement. This allowed them to control absence costs through a set monthly budget, and they saw real savings from the outset.
Product in focus … Critical Advantage Best Doctors
Best Doctors, the medical second opinion service, has launched an insurance service, Critical Advantage, in the UK. David Jordan of IHC explains how the service works, and who it can help.
How does Critical Advantage from Best Doctors work?
This service gives policyholders access to a panel of peer-selected specialists worldwide, not just The UK. This means it can offer the ultimate ‘second opinion’ service at the very time when it is most needed.
It goes on to ensure that, if the recommended course of treatment is not available here in the UK, typically due to National Institute for Health and Care Excellence (NICE) restrictions, then the policyholder can travel overseas to receive treatment, all at the expense of the insurers, including travel and accommodation costs up to £1,000,000.
Why is the service useful?
It aims to overcome restrictions that NHS and Private Healthcare provision here in the UK can have – a gap which exists due to the decisions that NICE makes regarding the viability of drugs and treatments.
So who does this service suit best?
It is suitable for anyone who believes or suspects that NICE may stop them from having access to potentially life-saving drugs or treatment here in the UK, or indeed anyone who values a second opinion service which will tap into the wealth of knowledge and experience gathered by the most highly regarded specialists in the world.
Can you give an example of how it might work should someone need to make a claim?
A policy holder will first need to have been diagnosed with one of the conditions covered by the policy, and had a course of treatment recommended by their consultant.
The policyholder can then ask Best Doctors to gather their personal medical records together, and pass them on to a panel of specialists selected specifically for their knowledge and experience in the field for which the diagnosis has been made.
These specialists may endorse the proposed course of treatment, at which point the policyholder can be satisfied that they are receiving the best and most appropriate treatment. But the specialists may also suggest a variation to the proposed treatment, or a completely different treatment, which if it can be delivered here in the UK, will be.
What if the recommended treatment is not available in the UK?
If the alternative course of treatment is only available in another country, typically because it is considered to be experimental here in the UK, or has otherwise not received NICE approval, then the policyholder will be given the option to travel to that part of the world where the recommended treatment can be given.
The cost of travel, accommodation and treatment are all covered within the £1,000,000 policy limit, as is the cost of travel and accommodation for a companion.
I’d say that the second opinion service alone is worth the annual premium of £134. The opportunity to have access to treatments which may be denied to patients here in the UK is invaluable in my opinion.
Podium … Healthcare trusts
Healix Healthcare is celebrating. This month, the group won the Health Insurance Daily award for Best Healthcare Trust Provider. The firm has certainly been working hard – healthcare trusts are seen as something of a niche product, but their appeal appears to be growing. These days, healthcare trusts can be used by organisations with as few as 100 employees, and they can be tailored entirely to the needs of the company that will use them.
“Trusts give you total flexibility,” says Paul Roberts, IHC consultant. “They can be completely bespoke. Not everyone wants that, of course, but if you do, it gives you the ultimate level of choice. You can choose from an almost endless list of treatments and care and include them in your healthcare trust. You might want to have teeth whitening or private maternity cover, for example,” he says.
Those companies who have been converted to the cause of healthcare trusts say that the ability to pick and choose benefits is one of the winning factors. Aylesford Newsprint, for example, changed from a conventional PMI scheme to the Healix Healthcare Trust. “It enables us to tailor the benefits offered to our staff to meet our own needs,” the organisation says. “However there is absolutely no compromise on medical care for our employees or their dependants, with access to a nurse-led claims platform as a central component of the service. It will also improve the quality of delivery of the service, compared to the previous PMI provider, from case management to treatment provision.”
And, perhaps surprisingly for a product that is entirely bespoke, a healthcare trust can actually bring about cost reductions – essential at time when budgetary constraints are a very real concern for businesses. As Aylesford says: “Through 100% profit share, it gives our business the cost controls that are absolutely essential during the current difficult economic climate.”
Indeed, for Cripps Harries Hall, cost cutting was one of the key benefits brought by beginning a healthcare trust. “Before our partnership with Healix,” says the group, “we were facing increasing private medical insurance premiums and needed a way to control future costs. Over the past year, the Healix Healthcare Trust delivered a further 10% reduction on our P11D rate.” However, the company says: “It brings us more than just cost savings. Healix offers us the best level of service, focused on meeting our specific needs, while delivering some really important service benefits for our partners and employees.”
One of the ways in which healthcare trusts help keep costs down is by removing the need to pay insurance premium tax (IPT). Currently levied at 6%, the tax is charged on premiums for private medical insurance, but as a healthcare trust is not an insurance product, IPT is not payable. “IPT went up from 5% to 6% in 2011, and while it may not rise again for some time, there is always scope for the government to increase the rate,” says Paul.
With total flexibility and the ability to reduce the cost of cover, it is not surprising that IHC sees the healthcare trust as becoming something of a trend. “You can change the benefits each year, so they can develop in line with the needs of the organisation,” says Paul. “And they can provide completely tailor-made benefits along with long term savings. What more could you ask for?”
Case study – Corporate healthcare trusts in practice
A company with a large trust scheme chose Healix to improve cost control and to take advantage of nurse led case management and cost containment. Healix suggested incentivising selective use of NHS Centres of Excellence where it was to the clinical benefit of employees, which would enhance const control. Healix’s nurse-led approach means it has the ability to actively manage cases and navigate patients effectively between NHS and private treatment where appropriate.
The choice of private or NHS treatment remains with the employee, but where NHS treatment is in the best clinical interest of the patient, and the patient is happy to be treated on the NHS, an NHS cash benefit, reflecting savings made on certain high cost treatments, can bring about significant savings.
A 40-year-old scheme member contacted Healix after being referred for a CT scan when investigations had revealed shadowing to his lungs and abnormal blood results. The patient was understandably concerned and was worried about delays for an NHS scan, so Healix nurses quickly reassured him by making arrangements with his consultant and the hospital for a private scan. In fact, an NHS appointment came through quickly and the patient decided to have the scan on the NHS.
The patient was diagnosed with Myeloma, a cancer of the white blood cells, and needed radiotherapy and chemotherapy treatment over the following seven months. The Healix nurses advised him that they could arrange for his treatment to be done privately or at a local NHS hospital with the same consultant.
The NHS hospital had better medical facilities and there was no waiting time, so the patient was happy to be treated on the NHS. His Healix case manager assured him that if he experienced any problems with the NHS, she would manage the transition to switch him back to private treatment. The member was very happy with the treatment he received on the NHS and he received a £24,600 cash benefit which was very helpful at a difficult time. The final cost of the claim to the employer was £40,000, a considerable reduction compared with the £150,000 it would have cost if all treatment had been done privately.
IHC News
Introducing IHC healthcare consultant, Tracy Hazelgrave
Tracy joined IHC as a healthcare consultant in June this year and will be working out of our Fleet Street offices. She brings to the organisation a wealth of experience, having worked for some 24 years in the PMI industry. During that time she has gained extensive knowledge and understanding of the way products and services have evolved, which she will be able to pass on to our clients.
Her first role within the industry was with Bupa in 1989, where she began work as a researcher in the Leeds office. She was promoted just a month later to the role of development assistant, and was subsequently offered the opportunity of a transfer to Bupa’s Barnet office as an intermediary sales assistant.
In 1992, Tracy decided to move into the world of brokers and since then she has worked in a range of organisations, including Bowring Healthcare, HSBC Actuaries & Consultants and more recently Fidelity Health Choice where she worked as a healthcare consultant.
Channel Islands day at the races
IHC has a longstanding and loyal client base in the Channel Islands, and this summer we wanted to find a way to thank them for the trust they put in us. And so on 11 August, we invited around 80 of our clients and prospective clients to join us for a day at the Jersey Race Club in an event IHC co-sponsored with AXA PPP.
We settled into a marquee for lunch overlooking the finishing line, with racecourse staff stopping by tables to collect bets. The Channel Islands community is tight knit, and the event turned out to be a fantastic way of bringing people together for a fun Sunday afternoon event. “It was wonderful to see how many people knew each other,” says Gemma Milford, IHC’s consultant working with Channel Islands clients. “There were people who had worked together in the 1990s, people who hadn’t seen each other for a long time. It was a great chance to see just how many people we do look after in the Channel Islands.”
In spite of the rain showing up on the day, the event was a huge success, says Gemma: “Everyone really enjoyed it. It was nothing more or less than the chance to say thank you to our clients.”