Much of the time, the cheaper, off-the-shelf healthcare insurance packages offer very poor value for money. Tom Burfitt explains how a little expert advice can help you find the best and most cost-effective way to build a healthcare plan for your business.

When it comes to building a healthcare plan, all too many businesses make the mistake of believing that an ‘off-the-shelf’ plan will cover all their basic needs. Surely these packages wouldn’t be offered so widely if they couldn’t be relied on, right? Wrong.

Often, these packages represent extremely poor value for money. So is there any real point in buying healthcare insurance that won’t pay out when you need it?

Historically, corporate private medical insurance was sold as a ‘one size fits all’ option, so companies either offered it as a benefit, or they didn’t. There was then a move – around the time of the millennium – to offer more modular products so companies became able to select cover that was more appropriate to their requirements.

More recently, this modular offering has been taken to an extreme; which means that because of the number of offers in the marketplace it can be both a confusing and time consuming process for organisations to establish the right options and level of cover for their requirements.

No benefit

As a result, despite the wide array of modular products now available, direct sales teams tend to focus on price by stripping away benefits, which means that in the end, these seemingly semi-bespoke modular plans, revert back to the ‘one size fits all’ variety. Because of this, organisations can discover to their cost that the seemingly well-built modular plan they agree to, is in reality a completely non-bespoke budget option that does not offer the levels of cover or benefit that they, or more importantly their staff, expect.

Healthcare insurance can be a great employee benefit and an excellent tool for employee engagement and motivation. But if your employees come to use the plan and find that it does not measure up to their expectations it can end up having the opposite effect and actually acts as a demotivator for staff.

When identifying your organisations’ healthcare requirements it is important to establish whether a modular plan will cover the needs of both your organisation and your employees, or whether it is worth investigating a bespoke plan, especially if cost-wise, the difference is negligible.

It is worth considering that bespoke plans often focus on service as much as cover, for example, they might include help and support for employees that need to use the insurance by advising them about where the best place might be for them to receive their treatment or what treatment they should be considering.

Cherry picking

Expert advice can be especially beneficial when it comes to choosing the right healthcare plan. An advisor will be able to help identify the extent of cover needed and how much an organisation should be looking to spend. They will then be able to make recommendations in terms of either compiling a semi-bespoke plan by using expert advice to cherry pick from modular plans or designing a completely bespoke option.

Healthcare – not just private medical care – is becoming an increasingly expensive commodity and as such, proper management control systems need to be put in place to help to control costs and keep private medical insurance affordable for your organisation.

HRs can work with their finance department or finance director and an external expert advisor to look at analytical data such as number of claims made and the average amount of those claims, and they will then be able to conduct trend analysis to make sure that the company is getting the most possible for its budget and spending its money in the right areas.

Ultimately, the aim should be to make sure that spending on private medical insurance is offset financially by reduced sickness and absence rates. Strategically this research can then be used, not just to compile an initial healthcare plan, but also to put together a 3-5 year healthcare strategy and benchmark your organisation against similar organisations or other companies within your sector.

It is also worth considering that any healthcare plan or policy should be about more than just private medical insurance, it should focus on ongoing wellness and occupational health as much as putting things right when they go wrong. If your healthcare plan actively encourages better staff practices, then ultimately the number of man hours lost to sickness, the number of claims made and the cost to your business should be reduced.

So whether you are considering a modular plan or a bespoke option, it is worth putting some time and effort into procuring your healthcare plan, and into seeking appropriate advice as this will pay off in terms of employee satisfaction and cost benefits. Ultimately, if your strategies are properly aligned then your healthcare plan should have a significant, measurable impact on the bottom line.

Tom Burfitt is an MD at Oval Healthcare