New trends in international private medical insurance

Many employers have traditionally accepted the relatively high cost of international private medical insurance (IPMI), labouring under the misapprehension that its cost is incredibly difficult, if not impossible, to contain.

International private medical insurance

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  • Many employers have traditionally accepted the relatively high cost of international private medical insurance (IPMI).
  • The performance of unnecessary medical procedures is helping to maintain high IPMI costs in some countries.
  • But employers can help to reduce costs by dictating the hospitals in which their staff can receive treatment.

This is, in part, due to the fact that the cost of IPMI has been increasing.

Richard Saunders, sales director at Healix Health Services, says: “The cost of international PMI is really going up. There are a lot more providers in the marketplace, but [there is still] exposure [for employers with] repatriation and possible claims for high-value items.

A US-based food-poisoning-related claim worth in excess of $2m (£1.3m) last year is a case in point, he adds.

But times are changing. A number of employers are beginning to realise that they can better manage their IPMI costs and are starting to do just that.

John Kaye, director of client management, Europe and Middle East, at Cigna International Expatriate Benefits, says: “In the last four or five years, employers have been looking much more at the sustainability of their expat programmes. They look at themselves first, [in terms of] making sure that they’ve got all the expats they need, and then they’re looking at how long assignments are and making sure [that their IPMI] provider can provide the appropriate cost.”

And healthcare providers have a role to play, too. 

“As much as employers still want rich benefits for expats, it’s more and more important that providers don’t just write cheques to hospitals at rack rates, and that we maximise network agreements and manage high-cost cases effectively,” adds Kaye.

More appropriate hospital choices for employee treatment can also help to contain employers’ costs.

Stuart Birch, senior health management consultant at Capita Employee Benefits, says: “There is a role for employers to play in learning from people on the ground, such as consultants, about how to provide a directed care pathway and position it as a positive to their employees.”

A directed care pathway would detail the medical facilities that expats and their families can visit for support and treatment to save them spending time doing their own research.

“It will entail a little bit of work, in terms of which hospitals employers want to prioritise, but it means that they could have a disproportionally positive effect on their overall claims experience,” Birch adds.

Tackling market fraud

Greater involvement in their IPMI strategies may also enable employers to tackle issues such as alleged market fraud.

According to Capita’s Birch, some hospitals perform unnecessary procedures, such as MRI scans, on employees who simply do not need them, particularly in the Gulf, Singapore and Hong Kong.

“The full service health proposition is all well and good, but there are plenty of examples where medical procedures just do not need to happen,” he adds.

The consequences of employers continuing to take a passive approach to their IPMI strategies could be huge.

Birch says: “If an employee has cancer here, domestically, yes, it’s life changing and very difficult, but there are tools to help support them, and they can stay at home and get back into the workforce in a staged manner.

“If they are based overseas, they have got to come home, so the employer has a failed deployment and all the difficulty around that.”

But regulation may be the only way to help drive future market growth as is currently the case in Dubai. From October 2014, the Dubai Health Authority has required employers with more than 1,000 employees to provide workplace health insurance.

Product development

Although IPMI product development has been slow in recent years, a number of healthcare providers are starting to respond to employers’ increasing scrutiny of their IPMI arrangements with expanded product and services offerings.

For example, Aviva International has invested in its Everyday Healthcare module to offer expats prescription medication, vaccinations and eyecare, as well as expanding access to its Gulf products into Bahrain and Jordan.

Meanwhile, Cigna International Expatriate Benefits is focusing on Europe this year, with plans to expand access to its life and accident and disability insurance, which it currently sells in the UK, Belgium and the Netherlands, elsewhere in Europe as part of a rolling programme.

And Healix Health Services has introduced a bespoking service for its healthcare trusts from this year.

Evolution of the IPMI market has been slow, but it is coming and employers need to prepare.