Figures recently released show that in 2009, employer- funded PMI policies fell by 4.7% which I think is mainly attributable to businesses failing or reducing their headcount in the recession rather than removing private healthcare provision. Levels of corporate PMI are driven by levels of employment. When the economic climate is good, insurers increase their volume of business which contracts in a downturn. But this time round there is an interesting paradox which could see some forward thinking insurers reverse this trend.
The first reason for coming to this conclusion is based on the proposed changes and cuts in the NHS. I can’t believe anything other than in the next three years, waiting times will increase. Employers absence costs will rise as a result unless they pay for speedier access to treatment. Many will turn to insurance, particularly low cost diagnostic services, to help rehabilitate ill or injured employees.
The second reason is based on the way insurers are widening their propositions as they compete for market share. There are now very few group income protection insurers who do not offer access to treatment and case management for employees signed off for 4 weeks or longer as part of the cost of the premium. This is before you consider the wide range of other services on offer.
Here’s what one well-known group income protection insurer now offers its clients in addition to paying claims:
- A business and legal support service
- A case management service to help manage short term absenteeism
- A rehabilitation claims management service
- An integrated Employee Assistance Programme
- Independent second opinion medical advice
Employer’s Liability insurers also offer a number of similar services in trying to attract more customers.
All this is making traditional private medical insurers – and there are less of them as consolidation continues – review what they offer. With other types of insurance encroaching onto their territory, they are now beginning to offer some significant add-ons including healthchecks, counselling, occupational health services and rehabilitation programmes.
These type of programmes are becoming more attractive as employers look to reduce cost by bringing several different services under one umbrella. This will be at the expense of mono-line service providers.
So the combined effect of longer waiting times on the NHS and improving their proposition could well put insurers in in a stronger position than some may have thought.
If employers have the right strategy and make informed purchasing decisions, they too could benefit from the wider services on offer. Managing employee health is more than just trying to minimise the costs of the same services year on year.