Colin Boxall: Is open-referral private PMI right for employers?

We are all suspicious of change when an insurer tells us it is for our own good. In such situations, perception can take over from reality.

Advo Group supports the concept of open referral, but with choice retained. Our job is to listen, understand and advise, including telling employers things they may not want to hear.

Our [employer] clients’ view of open referral is in two camps. The first is the positive: seeing sustainability, cost control, no shortfalls, access to the best specialists and quality control, while retaining some choice. Others take an opposite stance: that PMI is about choice, and removing choice undermines these principles. They are uncomfortable with the insurer, and not the doctor, deciding what is best. Employers that want choice will, understandably, have to pay more.

It also appears that, with little time to educate staff before implementation and lack of support from existing intermediaries, employees can view open referral as a reduction in cover.

With no immediate expectation of an improvement in risk profiles for many smaller organisations, where renewal drivers are still typically larger claims, [the provider] will struggle to justify the changes.

Advo sees open referral as a refreshing, solution to the problem of rising premiums. It offers reduced claims spend, aiding price stability but still retaining quality of care.

Although choice has always played a huge part in PMI, the main concern should be the correct treatment path. Employers will reap the rewards of open referral over the coming years, but it is no quick fix.

Colin Boxall is director at Advo Group