As employers increasingly outsource occupational healthcare, Sam Barrett analyses the market’s growth and influences
Case study: Leisure Link
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Getting someone else to look after employees’ health is becoming increasingly popular with more and more employers turning to the healthcare professionals for everything from sickness absence management to rehabilitation services.
The growth of the market can be seen in figures from Market & Business Development’s (MBD) UK Occupational health market development 2006 report. Growth levels in the outsourced occupational healthcare sector have huddled around the 10% mark since 2002. In 2006, the value of the outsourced sector is projected to reach £183 million, representing 50% of the total market.
MBD expects this trend to continue. While annual growth levels for the occupational health market as a whole, including in-house and outsourced services, are expected to fluctuate between 3% and 5% in real terms between 2007 and 2011, in the outsourced sector alone growth levels are forecast to be closer to 6%-8%. The share of the outsourced sector to the total market value is also expected to increase from 50% to 57% by 2011. Claudia Preedy, a market analyst for MBD, explains: “These predictions are driven by the public sector where the outsourcing trend is strong as a result of Labour’s policy on best value but we’re also seeing more private sector employers outsource services.”
There are several reasons why employers are outsourcing their healthcare requirements. “Employers are focusing more on their core competences at the moment and I expect this trend to continue,” she adds.
Certainly, running an in-house occupational health department has become more difficult in recent years. Increased health and safety requirements, such as the extension of the Disability Discrimination Act and the Health & Safety Executive’s Management Standards for Stress, mean it is more attractive to move responsibility for occupational health to an independent external company.
It’s also getting harder to recruit occupational health professionals. Not only is demand for these types of service growing but there is also a shortage of trained personnel. This, according to Preedy, is exacerbated by a reduction in the number of GPs who work part-time in the occupational health sector but have found themselves unable to dedicate the time due to increased continued professional development commitments.
These pressures will mean that only large employers and those in industries with a lot of health and safety requirements will be able to justify running an in-house occupational health department.
Government endorsement of occupational health has also helped to raise its profile among employers. As well as making fast access to occupational health a central part of its project for improving the health and wellbeing of working age people, it has appointed a national director for health and work, Professor Dame Carol Black, to oversee this and similar projects.
Commenting on the government’s stance, Jonathan French, a spokesman for the Association of British Insurers (ABI), says: “The government is working with insurers, employers and other related parties to make occupational health an important part of improving the health of the working population.” This would see occupational health becoming more important within the NHS.
French believes there are sufficient incentives for this to be put into action. “It’s definitely time we shifted from the current system, which is focused on financial benefit and compensation for sickness, to one that looks at how we can return employees to the workplace. It’s good for the government as it keeps people off incapacity benefit. It’s good for employers as they won’t have to pay for replacement staff. And it’s good for insurers as, although they may need to pay out more initially to get people back to work, they will pay out less overall.”
Also helping to raise awareness of the cost of sickness absence are the annual reports from the Confederation of British Industry (CBI) and the Chartered Institute of Personnel and Development (CIPD).
In addition, as the market has matured, more evidence of the effectiveness of using outsourced healthcare has become apparent.
One recent success story is Rochdale Boroughwide Housing. Back in 2003/04, it was suffering an average absence level of 17 days per employee so it took steps to reduce this. Paul Neate, managing director of Rochdale Boroughwide Housing, explains: “We were worried by the level of short and long-term staff sickness so we engaged Active Health Partners to manage our sickness absence. Employees now have to call the nurse helpline if they are unable to come into work. The nurse will discuss their symptoms with them and agree a return to work date. The nurses then notify the employee’s line manager and personnel, which enables us to plan better for staff cover.”
As well as improving management of staff cover, Rochdale Boroughwide Housing experienced a dramatic shift in sickness absence rates. Employee absence levels fell by more than six days per employee per year and were expected to fall even further.
Case study – Leisure Link
An occupational health service targeting musculo-skeletal and stress issues has gaming machine operator Leisure Link reporting reduced absence levels among its workforce.
Through the service, provided by Axa PPP Healthcare, employees can access physiotherapy and counselling much more quickly than if they had to wait for treatment on the NHS. Jacquie McCulla, HR manager, says: “As a company, we noticed we had particularly high musculo-skeletal incidents. Our people lift heavy machines on a daily basis. If they don’t lift them, they have to bend down to fix them or collect money.”
In addition, qualified nurses provide practical tips and advice over the phone, which has helped to reduce the number of recurring injuries.