Ann Greenwood, Director of Business Markets at healthcare giant BUPA talked to Annie Hayes about the smorgasbord of healthcare options available and explained the reasons behind the rise of private medical insurance as the number one employee benefit in the UK.
Q1: Healthcare together with additional holiday has overtaken company cars as the most popular employee benefit – why do you think this is?
Answer: Private medical insurance (PMI) has a broad appeal to people of all ages, particularly to employees with families and the great thing about it is that businesses that buy into it also benefit. It offers the dual advantage of employees receiving an additional entitlement while employers profit from reduced absence.
Q2: What part does healthcare play in reward packages?
Answer: Healthcare plays an increasing part in reward packages. The interesting element is the types of staff and sectors who buy PMI is ever-changing. Traditionally sectors including manufacturing and business would provide PMI, today newer industries including service and technology businesses are buying into it. These types of organisations also tend to offer the benefit across the board, whereas manufacturing for example tends to restrict the allowance to key workers. Increasingly PMI is an expected part of the reward package and is a key part of attracting and retaining staff.
Q3: A recent report by YouGov claimed that Britain is a nation on the brink of serious neurosis. Do you believe this is true and if so do healthcare providers like BUPA play on it?
Answer: I’m not sure. It certainly receives a lot of attention in the press and while I believe that certain parts of the population are obsessed with well-being it doesn’t appear to be changing behaviours. In January for example the gyms are packed but by May only the regulars are still attending. We’ve been talking to large employers for the last three years and they really want to promote better health through the workplace and do this through improving the range of food available if for instance they provide canteens and/or gym membership. There is also an increasing interest in promoting health education and providing lifestyle advice.
Q4: How have changes in working patterns altered the state of health today?
I don’t know whether changing working patterns are to blame for our state of health but businesses are certainly starting to accommodate workers by offering more flexible working practices. These policies particularly appeal to women and I think that the old regime of longer working hours is no longer relevant for the way we will work in the future.
Q5: Should we be concerned?
Answer: Yes we should in relation to obesity, food and stress. I don’t believe that stress is a condition, it’s just a symptom of something much deeper. We need to improve our management of absence, more and more people are getting signed off with stress – we need to look at mental health and obesity and their links to behaviour.
Q6: What kinds of trends in healthcare provision are there at the moment?
Answer: We’re seeing year on year growth in PMI and we’re also seeing an increase in the number of employers setting up Employer Assistance Programmes (EAP). This Market is growing by 30% per year. There seems to be a genuine reaction from employers in the last five years to help employees with stress. Most EAPs offer a 24 hour helpline with the option for callers to remain anonymous and telephone counselling, where operators can recommend face to face counselling if appropriate. Our feedback shows that EAPs are very well used.
Q7: Is healthcare a benefit that is confined purely to larger businesses?
Answer: No. We’ve seen more growth from small-to-medium sized businesses (SMEs) in the last ten years then we have for larger organisations. After all larger businesses only cover 30% of the workforce but we do see a difference in the benefits they offer and the issues they face. SMEs for example are less likely to have formalised benefits and probably won’t have an in-house HR function. It’s usually at year two or three in their life-cycle that they start to look at healthcare benefits because this is when they want to attract employees as they prepare for growth. We routinely bring in new SME customers and the movement within this sector is more rapid as newcomers enter and businesses are quick to exit. There tend to be fewer changes in larger businesses over time.
Q8: Is a one-size fits all approach to healthcare benefits the right approach?
Answer: No. I think it depends on the objectives a business has and the budget they have to spend. The industry must offer more flexibility and choice to businesses to encourage them to cover more employees. Healthcare doesn’t tend to work well in flexible benefits because it makes it more expensive. We recommend that employers put in a core level of cover.
Q9: How can bosses help employees to stay healthy?
Answer:
- Promote health awareness and education
- Implement smoking cessation programmes
- Provide healthy options in canteens
- Health education through websites eg advice on how to manage stress, how to improve nutrition, exercise and sleep advice
- Subsidize gym membership
- Offer exercise classes
Q10: Are employers getting more sophisticated about what they offer?
Answer:
They’re starting to. It’s easier to offer more sophisticated benefits when you’re an employer of a large workforce located at one site but it’s not so easy to do this where there are multiple sites. More organisations are looking to combine areas of health and risk benefits, to provide a more integrated solution. They are looking for help to reduce long term absence and lost working time. BUPA launched 360 degree health risk management last year to address this specific issue.
Q11: Do healthcare benefits really boost the bottom line?
Answer: Yes – absence management is a huge issue for employers and PMI can help reduce sickness and lost productivity by offering access to treatment more quickly which in turn triggers a shorter recovery period, ensuring a faster diagnosis and quicker action.
Q12: How can we measure it?
Answer: Last year, PMI saved businesses £2.5 million working days that would otherwise have been lost to illness, saving businesses conservatively £325 million.
Q13. What is the state of the market – is it getting more saturated?
Answer: It is growing but at quite a small rate, I think the economy in the last two years has had an impact. Last year we saw a growth rate of 1.3%, it’s had slow to medium growth therefore rather than a ‘big bang’. We saw one of our competitors QBE exit the marketplace in January but Prudential Health entered so there is some movement.
Q14: What are your final thoughts?
Answer: Improvements in the NHS haven’t really impacted on us. Health is still top of the nation’s agenda and that’s a good thing. There is a duty on providers to be more innovative on price and cover so that different types of workers can benefit, for example part-timers. Key to success over the next five years will be BUPA’s ability to provide businesses with a range of products to suit all budgets and integrated packages for those companies who want it.
For further information on BUPA please see: www.bupa.co.uk
