Healthcare product development means employers can offer more at little extra cost, says Sam Barrett
Advances in medicine, new technology and customer demand have resulted in a flood of new, innovative healthcare products coming on to the market, many of which can bolster an employer's benefits offering.
One of the key areas for new developments is around employee health and wellbeing. Jan Lawson, managing director of specialist healthcare consultants the Private Health Partnership, says: "Insurers are trying to get rid of their bad boy image where they're only around when something nasty happens. Instead, they're looking at ways to help and support and provide a more positive benefit that focuses on health rather than illness."
One of the companies at the forefront of this development is Pruhealth, which launched its private medical insurance product in 2004. The plan, which is based on the South African model, offers money-back incentives to employees that take up its vitality programme but also aims to reduce claims costs as healthier employees claim less. Among the extras it offers are discounted gym memberships, health assessments, screenings and online health guides. Employees that engage with a range of these services and don't need to claim are rewarded with money back at the end of the year. This can be as much as £750 for a family, which is defined as a minimum of employees and their partners, although it can also include children.
Dave Priestley, sales director at Pruhealth, explains: "On average, we find that employees who are engaged with our vitality programme claim at a third of a level of those that are only a little bit engaged. In the SME market, thanks to the refunds paid to employees, there was a 1% reduction in premiums this year, against an industry average increase of around 10%."
PruHealth is not the only medical insurer to enhance its plan with health-related benefits. Gym discounts have become fairly standard extras, while many insurers have also added freebie health information services to their plans. Medical information and GP helplines are also fairly standard now, for example, Axa PPP Healthcare has its Health at Hand service, while Standard Life Healthcare offers a 24-hour GP advice line.
Other providers offer internet-based services, such as Norwich Union's Personal Health Manager, which contains medical information as well as a symptom assessment service and a health assessment.
To enhance its medical insurance offering, Bupa recently made its health assessment service, Positive Health, available to all its corporate clients. Marco Bannerman, head of corporate sales at Bupa, says: "Employees can use this to find out how they can improve their health and they'll receive emails to support them with any changes they make. This is good for the employer as a healthy workforce is a more productive workforce."
He adds that this type of service won't appeal to all employees but expects to see take-up of between 30% and 40%.
Services can also be purchased separately. Axa PPP Healthcare, for example, has developed a range of health-related services, Employee Support, that includes online screening, health and fitness education programmes, and stress audits.
The growing cost of cancer drugs has also forced changes in product design as insurers look to control costs without necessarily restricting benefits. The arrival of drugs such as Herceptin, which costs £20,000 a year, and Tarceva, at £1,700 a month, could put a serious strain on medical insurance funds.
Mole screening
In July, Bupa launched a mole screening service, the Mole Check Clinic, to provide employers with a way to help identify cases of skin cancer at an early, and treatable, stage. The scan takes around 15 minutes and costs £95 per employee, although this is negotiable for larger organisations. Additionally, if take-up is high, Bupa is likely to roll out further early detection services for other conditions.
Alex Bennett, head of healthcare consulting at Aon, believes this is a positive move. "Early detection services such as this can help to manage a severe cost pressure and, ultimately, save money."
In another bid to address the rising cost of cancer treatment, WPA is looking at rolling out its individual plan, mycancerdrugs, to the corporate market. This provides £50,000-worth of cover for cancer drugs that are not available through the NHS and individual customers pay a premium that is equivalent in pounds to their age.
Charlie MacEwan, head of communications at WPA, says: "We've had a lot of interest from benefits consultants and could package it as an NHS top-up scheme, initially for cancer but possibly for other illnesses and conditions too."
Another area where insurers have added extra services is at the point of claim on products such as group income protection and group life benefits. Examples of these include a bereavement counselling service that is provided by Red Arc on Aegon Scottish Equitable's group life plans and Canada Life's Best Doctors service, which provides a second opinion from a leading doctor on a diagnosis and treatment plan.
Marion Ware, head of marketing at Canada Life, explains: "This is provided to all group income protection customers and provides reassurance if they, or a member of their family, is diagnosed with a serious condition. We've had some very positive feedback with people benefiting from advice from the world's leading doctors."
Lawson believes these types of service add value to insurance perks. "These services reflect very well on both the insurer and the employer. Where an employer might be dreading an employee suffering from a terminal illness calling in, with these services they have a package of information and support they can offer," she explains.
Insurers are also taking on board the growing burden of law by adding support and advice for HR in these areas. Canada Life customers benefit from its Business Care package, providing legal and HR assistance, while Unum offers an absence management assessment that will audit an organisation's practices in this area to ensure they are compliant and effective. Wojciech Dochan, head of commercial marketing at Unum, adds: "We've also introduced training for HR professionals to help them improve their knowledge."
Voice recognition
Several further insurers are launching absence management programmes to help employers integrate existing services and maximise their effectiveness. Canada Life, for example, offers one to its income protection customers, while voice recognition systems have recently been launched by Axa PPP Healthcare and Unum.
These voice recognition services can be particularly cost-effective. Unum offers its service at £20 a head for non-insured customers and just £12 a head for insured ones, "When someone calls in to report an absence their line manager will be notified by email and text. It can also be integrated with other healthcare services and insurances to ensure any potentially long-term problems are dealt with swiftly," explains Dochan.
But even after this flurry of activity in the healthcare market, it is unlikely that product development departments are going to be taking a break as further services are sure to be added to plans.
Bennett believes these extra services will force employers to consider why they provide particular benefits. "Employers need to think carefully about what they want to offer as it may not always fit with their objectives."
He believes that there could be a polarisation between plans with additional services and those that are completely stripped down. "Many of these developments work well within flexible benefits and voluntary arrangements so we could see an increase [there] too," he adds.
Tullet Prebon puts money on health
Having provided its employees with private medical insurance for several years, City-based money brokers Tullett Prebon switched to PruHealth's product earlier this year.
All of the company's 1,000 staff benefit from the cover, which Deborah Lamb, company benefits consultant at Tullett Prebon, believes has had a significant effect on health and wellbeing. "It's woken a lot of people up about their health. Our employees are concerned about their health and this plan gives them help and support to look after themselves better," she explains.
Tullett Prebon has run a couple of campaigns in association with PruHealth to help employees lead healthier lives. "PruHealth came in and ran blood pressure tests for our employees, providing us with lots of posters to help promote the event. This was very well received," says Lamb.
She is also in the process of promoting another offer, which enables employees to benefit from free gym membership providing they go at least twice a week. "This will encourage employees to be more active and look after their health, and it's really causing a bit of a stir. We don't monitor sickness absence but the plan has definitely helped to create a much more upbeat feeling throughout the company," Lamb adds.