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Jamie Lawrence


Insights Director

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Understanding employee healthcare leads to better management


Article by Pamela Gellatly, CEO of Healthcare RM

When Dame Carol Black first put absenteeism on the Government agenda in 2008, the market for employee health and wellbeing services really took hold. Over the last few years, we have seen huge investment in this area as employers seek to manage sickness absence better and improve employee health.

Given the financial implications, it is no surprise that employers are keen to address this issue. The Health and Safety Executive (HSE) estimates that sickness absence accounts for around 10 percent of a company’s profits, while the CBI puts the annual cost to the UK economy at £17bn.

Yet despite this interest and investment in employee health and wellbeing, much of it misses the point. Employers have been too focused on treating the symptoms of workplace ill-health, instead of the causes. By failing to address the underlying causative and contributory factors affecting the ill health, such as lack of appropriate exercise and poor nutrition, these absence management processes and healthcare benefits are costly, may drive inappropriate treatments and fail to resolve the health problem.

Another issue is that the healthcare industry traditionally operates in silos. Providers sell and employers buy in silos. As a result, the HR, health and safety and occupational health departments are all purchasing products to meet their needs, but rarely working together at a wider strategic level. Even providers that claim to integrate benefits fail to really integrate the actual management of the clinical, occupational, financial and legal aspects of ill health.

Understanding employee health risks

The HSE has revealed that approximately 80 percent of all ill-health costs are due to musculoskeletal and mental health disorders and according to the CIPD, these disorders account for half of all sickness absence. These health issues, however, are often inefficiently managed both within the NHS and by the private sector, with patients waiting many weeks for treatment, despite evidence that early intervention is crucial to a successful recovery.

Lifestyle related risk factors such as poor diet and nutrition, insufficient or inappropriate exercise and increased stress are also a major, but often overlooked, issue for organisations. These risk factors, which have traditionally been misunderstood and as a result poorly managed by employers, can have a huge affect on an individual’s health. Poor lifestyle choices not only impact an individual’s susceptibility to mental health and musculoskeletal disorders but they also significantly increase the likelihood of diabetes, cancer, heart disease and other serious illness.

Historically, occupational health, with its focus on occupational risk factors, has not necessarily recognised the extent that individual risks play when assessing ill health. As a result, many in the health industry have stated that the risks are work-related – which often is not the case –and has meant that personal risk factors have rarely been taken into account. Yet research and studies into workplace absence have shown that it is often these underlying personal issues which are the main contributory if not the primary factor in an individual’s ill health. Failure to address issues such as nutrition and corrective exercise can lead to poor performance, long term absence and increased costs for employers.

How can these risks be addressed?

1. By promoting a healthy lifestyle
At a practical level, organisations need to develop a proactive approach to health management by moving away from a focus on sickness and encouraging employees to take responsibility for managing their own health. In our experience, when it comes to mental ill health or musculoskeletal disorders, 50 percent or more cases can be addressed by encouraging individuals to adopt active lifestyles and good nutrition.

The buzzwords of health and wellbeing promote the opportunity for the healthcare industry to sell more products to employers such as lifestyle assessments, health screening and gym memberships. However these are often costly and rarely result in any real lifestyle or behavioural changes, unless part of a broader management programme. It is by finding innovative ways to support people in making small and achievable lifestyle changes that will make the biggest difference to their overall health.

Supporting improvements in employees’ health should be focused on adapting an organisational culture which actively promotes regular exercise, a good diet and a sensible alcohol intake. This can be done at relatively low cost through activities such as sponsored sports events, creating competitions between teams, departments or sites or setting up a lunchtime walking club. Assigning a number of ‘health’ champions across the organisation can also make a real difference and help generate buy-in from employees.

We have also found that encouraging individuals to self manage a problem can deliver great returns. For example, in a recent case a van driver was getting a lot of back pain and blamed the company van. On assessing him, we found that he had tight hip flexors and hamstrings, so he was given some simple exercises to address these issues. As a result, the back pain reduced and the company did not need to replace the van or pay for unnecessary treatment.

2. By managing healthcare more strategically
At the strategic level, organisations need to rethink the traditional ‘silo’ approach to employee health and develop a more holistic view. Health and wellbeing services, including EAPs, carelines, private healthcare insurance, permanent health insurance, case management, screening and occupational health rehabilitation, for example, need to be integrated and managed collectively. Purchasing several ‘products’ from one provider does not equal integration.

Healthcare RM takes this approach with clients in order to deliver a number of strategic and competitive advantages. It simplifies and improves the service for line managers, employees and their families, by providing a single point of contact for all health matters. It provides better outcomes for employees by eliminating mixed messages, minimising conflict of advice and avoiding unnecessary cost shifting into the private sector. More effective management of the clinical, lifestyle and occupational factors associated with ill health and injury in turn reduces costs for the employer.

One example of a UK organisation reaping the strategic benefits of managing healthcare in this way is travel firm, TUI Travel. The company appointed Healthcare RM in October 2010 to integrate all existing healthcare management services and to plug any gaps in provision. Since then, Healthcare RM has worked with TUI Travel to integrate the case management with the management of the group income protection (GIP) and by using the rehabilitation services provided by the GIP, has in turn been able to reduce the cost to the healthcare scheme.

Head of Group Reward at TUI Travel, Tim Taylor explains: “We now also actively manage the musculoskeletal claims. By removing the requirement for our people to see a GP, we have been able to manage the ill health via more conservative pathways, avoiding unnecessary or inappropriate treatment and addressing the underlying individual issues. As a result, the cost per claim has been reduced and we have seen a ROI of 135 percent on our healthcare scheme alone.”

As individual health risks continue to increase, this puts impossible demands on the NHS and ultimately places an even greater burden on employers. Those without a health risk management strategy would be wise to reconsider.

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Jamie Lawrence

Insights Director

Read more from Jamie Lawrence

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