Healthcare strategy and PMI – Roundtable Report
12 September 2013 London
Hosted by theHRDIRECTOR.
Chaired by Jason Spiller.
Claire Douglas, Occupational Health Manager – Pitney Bowes
Mary Laidlaw, Policy Consultant – Royal Bank of Scotland Group plc
Regina McEvoy, UK Benefits & Welfare Manager – Thomson Reuters
Titi Olusanya, HR Advisor Projects – Lambeth Living Ltd
John Picken, Managing Director – Shandwell
Kirsty Povey, Specialist Reward – Towry Limited
Andrew Walsh, Head of Human Resource – The Pensions Trust
Rogier van der Werf, Operations Manager – Gallup
Dr Alison Whybrow, Chartered Psychologist
Chris Moore, Head of Key Accounts – Simplyhealth
Howard Hughes, Head of Employer Marketing, Simplyhealth
Do we become a country, like the US, where employees have to complete a questionnaire, before they are even allowed into a plan? If they smoke or are overweight, are they excluded?
The cost of absenteeism due to illness is estimated to have directly cost UK employers 3.2 billion 2010/2011 (Government statistics) and a number of realities are conspiring to make the situation even more costly and challenging. As the crisis in the NHS deepens, waiting times for healthcare increases and health issues such as obesity, as well as the abolition of the DRA raising the age demographic in the workforce, means absenteeism will become an increasing concern and cost for employers.
Government is pressing employers to take on a greater responsibility for managing the healthcare and wellbeing of employees; to providing a platform, culture and the facilities and opportunities for people to adopt a healthy lifestyle and have greater self-awareness of health issues. Also in question is PMI, expensive and traditionally only offered to top-tier executives, leaving the wider workforce without health cover and at the mercy of an increasingly unreliable NHS. What are the pressing healthcare issues that are impacting on businesses and how should employers formulate a comprehensive workplace healthcare strategy that is affordable, inclusive, meets these challenges and improves outcomes, in terms of employee health, performance, engagement and absenteeism?
Are rising health issues such as obesity an increasing concern in the workplace? How is DRA abolition, increasing the age of the working population, likely to affect how employers view and deal with absenteeism due to illness? Let us look at the broad issues; obesity, poor health, the ageing workforce, all pressing the NHS, and impacting employers through absenteeism and reduced performance. Plus the rise in musculoskeletal cases and mental illness.
Claire Douglas: The ageing workforce in particular is proving challenging for everyone, especially in roles which are more physically demanding. There comes a point where employee absence may increase due to musculoskeletal problems that are typically associated with aging such as arthritis. Businesses need to be much more proactive about getting interventions in place such as advice from physios and ergonomic best practice in workplace environments, to prevent these problems in the first place.
Chris Moore: In terms of private healthcare schemes, musculoskeletal is one of the greatest causes and costs, up with the other big cause of absence, mental health and stress. Obviously the latter is less tangible, but it is a huge risk and liability. Most notably, musculoskeletal illness is not just people doing physical jobs, increasingly it’s people sat at desks. There are risk assessments for work stations, this should happen more, and specialist advice is always a good thing.
Andrew Walsh: In terms of musculoskeletal causes, this is where health & safety policy and wellbeing policies merge because, as an employer, you’ve got a legal obligation, and if you don’t make provision for musculoskeletal risk assessments, just from a business point of view, you’re going to get legal comeback.
Claire Douglas: Mental health issues are still more prevalent that musculoskeletal problems but it’s a close call. The issue for organisations is that mental health tends to have a much more long term impact with absences averaging ten weeks against shorter absence periods for those suffering with musculoskeletal problems.
Chris Moore: It’s because those cases are not tangible and there’s a stigma with mental health that makes it difficult to manage in the workplace.
Much of the absence rate issues are due to lifestyle choices.
Chris Moore: The NHS is trying to fight issues such as obesity and alcoholism, to name but two, and it is a huge drain on NHS resources, and unquestionably, employers are on the receiving end of that.
Regina McEvoy: If Government said the NHS would no longer treat people with high risk lifestyles, that would definitely put the onus on people to consider a more responsible way of life. Do we become a country like the US, where employees have to complete a questionnaire, before they are even allowed into a plan? If they smoke or are overweight, are they excluded? Employers can offer help to employees, but they cannot force them to do something they don’t want to do.
Andrew Walsh: You raise an interesting point, people have to believe that to be healthy is a good thing, and although we can give them help and advice and a healthy environment, at the end of the day it’s down to them, along with the will and involvement of leaders at every level of the organisation.
Howard Hughes: Awareness and openness are key, for example mental health in particular has always had a stigma attached, but it’s getting easier for people to be open about issues so we can ensure they are not put in the wrong environments. That’s played out in the stats; people are taking more and more time off for mental issues. Yes and people will talk about it openly, and when they do, how does the employer go in and help treat them? Care needs to be taken so as not to discriminate.
The word “directive” from Government immediately puts up shields doesn’t it?
Regina McEvoy: The launch of “Change for Life”, for example, it’s always those who are healthy who take it up, the “unhealthy” ones would ‘run a mile’, paradoxically.
Chris Moore: Yes, and where we introduce screening programmes into organisation, we find that it’s those who are already healthy that have themselves checked out. You don’t get to the vast majority of people who need to be checked out who are potentially at risk.
Claire Douglas: We held a Walk to Work event at Pitney Bowes recently which is run by Living Streets Charity. We had teams of employees from many of our sites who took part in a competition to see who could walk the furthest. We gave them pedometers and the sites competed against each other. The level of engagement was excellent. We also have a weight loss programme and dieticians to support people in their health aims.
And every workplace has different demographics, a marketing company will have little in common with a steelworks, for example. In general, why are we failing to get to grips with general poor health and subsequent absenteeism? Titi Olusanya: It’s the basics, what people do at their desk and what risks they take. If we’re looking at age and obesity, every day people are their desks all day. Maybe we need to go back to assessing what we do on the ground with our managers and our staff.
Chris Moore: People walk ten yards from their front door to their car and then 30 more from car park to their desk. If you could close the lift for the day, that would at least increase heart rates.
Andrew Walsh: It’s important to put things into perspective, years ago most people smoked and went to the pub at lunch time. Now people are living longer and it’s all linked with a greater awareness of health.
John Picken: Sickness absence has actually reduced over the last few years. However, discrepancies between the many surveys in this area make interpretation difficult. For example, PWC reported in the summer that UK workers take an average of 9.1 days off through sickness each year which is nearly double the US rate and four times more than counterparts in Asia Pacific. At the same time, the CBI came out saying the average absence rate for UK workers is 5.3 days. How can there be such a massive difference between the two?
Chris Moore: There’s more presenteeism in the workplace as well, which potentially is more harmful in the workplace than absenteeism in some cases.
Looking at the ageing working demographic, even if you’ve had a relatively healthy lifestyle, you can’t stop getting old, employers will have to counter that.
Claire Douglas: It’s about being proactive and preventative and thinking ahead. We know the population is ageing, so what are we doing about it? Are we putting adjustments in place to ensure these employees can work more comfortably, for longer? There’s lots that can be done. We give physio and ergonomic advice to our staff, and we risk assess those in more physically demanding jobs to ensure on-going health and wellbeing.
Rogier van der Werf: It’s important to take an individualised approach, if a valuable older member of the team would like to stay on but wants to reduce their number of working days, have an open an honest conversations about the options.
Titi Olusanya: How much do we expect the employer to take responsibility for? We probably need to shift some responsibility onto the employees, to say ageing is a part of life, and work together for mutual benefit.
Howard Hughes: It comes down to something called corporate culture. How many organisations would have that honest discussion? Generally, it doesn’t happen at the moment. You can see this train coming at you, an ageing workforce, and it’s something that really does need thinking about now.
Andrew Walsh: Healthcare at work is difficult to measure. We have awareness weeks where we have somebody in to talk about, say, prostate cancer, and these are well attended. But to do this we take people off the job for an hour, and so we’re losing productivity for that hour. The question, is where’s the payback? And it’s very, very difficult to evaluate that.
John Picken: EEF, the manufacturers’ organisation surveyed their members this year and the proportion of employees with no sickness absence has increased from 40 to 51 percent in the last five years. However, whilst this is a dramatic improvement in the number of absence episodes, longer term absence is now the real costly issue. This mainly relates to back problems, surgery and chronic conditions, all issues that mainly affect older employees. Logically, sickness absence rates should be higher in this age group.
Chris Moore: There’s a dual consideration; older workers have great experience, but inevitably, they will cost more, in terms of health checks and PMI.
Claire Douglas: Several organisations used to run medicals for people over sixty but stopped doing them as they thought this might lead to accusations of discrimination. But this kind of discussion can be handled sensitively and intelligently and it’s a great way of engaging and moving the conversation forward onto areas such as pensions, retirement plans and that sort of thing. It can be a positive and beneficial discussion for the employee.
Much of this comes down to line management, building or changing culture and crucially, leadership?
John Picken: I recently managed an awardwinning cancer screening campaign for a global IT company. We secured high level sponsorship from the UK CEO and HR Director, to the extent that they appeared on campaign posters and T-shirts, urging colleagues to take part. This had a massive impact on uptake with employees following the call from their business leaders.
Chris Moore: Agreed, leading from the top is vital, and it’s important to view managing healthcare as a business tool. There will be some issues around disclosure, but those individuals need to be picked up by Occupational Health – one of the big dichotomies is that OH only gets involved when a line manager reports to them, and often that’s too late, it’s about intervention such as health checks and screening.
Titi Olusanya: Most organisations are just beginning to catch up on the whole wellbeing agenda, as part of how you develop staff and the cost of it. From our point of view, it’s always been led by employees themselves. The difficulty can be getting the buy-in from the top at the start, because I think the cost bit is really difficult to quantify, the correlation between absence costs and wellbeing costs. My experience is usually it bubbles from the bottom and then the senior management see people are really interested and so it takes off.
Howard Hughes: Indeed, how do you show your return on investment? The old adage is, be careful what you measure, sickness absence is a very blunt measuring instrument too. But the fact is, good health and awareness is good business”. The bottom line is, it impacts positively on overtime payments, temporary recruitment, permanent staff payroll, legal costs, insurance premiums and healthcare costs. All in all a lot of positives, and your revenues potentially go up because you’ve got better productivity and a more motivated workforce.
It’s not difficult to draw a line between levels of engagement and absenteeism.
Rogier van der Werf: I agree that absenteeism on its own is not an effective measure for wellbeing, and it’s better to look at a combination of measures. There is a direct correlation in between wellbeing and employee engagement. Employees that are highly engaged are more likely to be healthier and make healthier lifestyle choices.
Andrew Walsh: Going back to early intervention, we give flu jabs to people and it costs us around £6. There is a psychological benefit, the company is giving you something for your health and, if you wake up in the morning and you’re feeling a bit down, but you’ve had a flu jab, you say; “it can’t be flu”. It seems to work, but for a very low cost.
Claire Douglas: Wellbeing is connected with reduced staff turnover rates and increased productivity. There is a growing body of supporting evidence – the Dame Carol Black report and Robertson Cooper has done a lot of work on wellbeing, again concluding that it does lead to results in terms of productivity, and it is an area worth investing in.
Rogier van der Werf: To achieve the benefits, the upfront investment in wellbeing must be there, you’ll reap the benefits later, over a period of time, but it needs a long-term view.
Chris Moore: The short-term view is the economic climate has meant that justifying budget has been an obstacle for many employers. The harsh facts are, this will cause organisations long-term, deep-seated problems, both cost and operational, in the long term.
Titi Olusanya: From the local Government point of view, it is the culture that we pay for sickness absence, which increases, depending on your length of service. Government should look at how one deals with that sort of sickness absence cost, because some people will see that as an entitlement.
Andrew Walsh: Or the classic, I’m entitled to two extra days holiday a year if I don’t have sickness absence.
Swinging the lead – this is a part of culture change, and promoting personal responsibility.
Andrew Walsh: It has to be part of the overall culture of the business. You often find that a health and wellbeing strategy is set up but operations and other areas of the business are not aligned with it, so there is no congruence.
John Picken: There’s a big difference between genuine absence through illness and swinging the lead. The CBI estimates that 15 percent of absence is not genuine which means that 85 percent is and that 85 percent costs a lot of money. This is what we can manage, through an effective healthcare strategy. Too much time and effort is spent agonising over the estimated 15 percent.
Kirsty Povey: We’ve seen a reduction in the “swinging the lead” culture. We have over 20 percent of our workforce on some sort of flexible working arrangement, whether that’s compressed hours or reduced hours or just flexing the start and finish of their day to help suit their lifestyles. We’re in an industry which is dominated by older men and that is just the way it is, but we choose to have very adult conversations.
Howard Hughes: Personal responsibility is key, as is the role of line managers. Our organisation sells products that help organisations get people back to work, which is a bit like closing the stable door after the horse has bolted. You’re much better off dealing with people in the workplace before health intervention is required. And the line manager interface is absolutely crucial here, and that’s how you stop people from swinging the lead and cut cost.
Claire Douglas: The line manager interface is critical. Simple measures like conducting return to work interviews when people have been absent – even if just for a day – can make a big difference. Asking why people were absent and checking they’re OK lets employees know that these things are monitored.
Chris Moore: Consistency in an organisation as well. Some managers may be good at recording absence at day one, whereas other department managers may let it go. So having consistency in order that people are treated the same can only happen if it is reported quickly, and an organisation like us can get started to assess that individual along with occ health, and start to take some key actions.
Kirsty Povey: It’s education, the awareness piece, and the knowledge that absence is monitored. We’ve recently invested in a new HR Information System which is giving all employees direct access to their sickness records, so they can see at a glance what their last year’s sickness absence actually looks like. So cases of Mondayitis, stand out like a sore thumb. The ROI is clear, and it’s helping us to change patterns of behaviour.
Andrew Walsh: It’s important to remind people that we’re running businesses here, and I think some managers are frightened of dealing with the issues of sickness and absence.
But workplace relationships are changing as are how businesses operate, flexible and remote working for example
Regina McEvoy: Exactly, we have managers based in different countries and they don’t really know if an employee is at their desk every day. It requires different approaches and measures.
Alison Whybrow: Manager skills have needed to change, honesty is even more important in day-to-day dealings and conversations. Relationships create people’s empowerment, engagement and a sense of personal responsibility, and this is galvanised by leaders being much more aware of the shadow they cast over the organisation, so we have come a long way.
Rogier van der Werf: Of course, good managers build relationships on trust and transparency and this goes a long way to supporting employers to improve their lives, as well as helping them to boost their performance, and this is the foundation for being able to have these adult conversations.
Andrew Walsh: There is still work to do, but I think there’s much more awareness and openness, and a recognition of the challenges.
In consideration of Government’s directive to employers, to take greater responsibility for employee health, what are the current strategies for healthcare provision in the UK and the existing relationship between state and employer-led healthcare provision?
Chris Moore: We’ve discussed absenteeism. Effective provision of healthcare is a key focus, and an absolute imperative, training for managers. The biggest issue we come across is a lack of awareness and knowhow to make occupational health effective, from building personal responsibility and living more healthily, right through to taking full advantage of what’s on offer. But actually it’s getting employees to take the carrot and have some healthcare, the preventatives such as check-ups and screening. Other hurdles include data protection, which can stand between an individual and an employer coming together and having that open, frank dialogue about sickness or absence. Once that is ironed out, employers can make some headway in gaining agreement for an employee to get checked out and treated, and that’s key to reducing absence and controlling costs. It’s stacked up against employers, especially with data protection, if an individual does not want to have treatment, occupational health can’t force them. But managed correctly the positive messages and outcomes do ring those changes.
Kirsty Povey: Agreed, one of the biggest challenges is, even when you do get an individual’s consent, the timescales that can be involved in actually obtaining that information from the GP or healthcare specialist just seems to drag on and on, and that’s only just exacerbating the situation for the individual concerned.
Claire Douglas: The crucial point is gaining the employee’s understanding as to why you want that report and why you want them to see the Dr. The alternative is acting on medical information that you have available, which actually isn’t in the employee’s interests. Obviously, the more an employer knows about a medical situation, the more they are able to help the employee. It’s getting this positive message across to employees.
Discrimination is something employers are, by nature, very sensitive about. What is your advice to them?
Chris Moore: The employer needs to know their risks, and you need to fund healthcare appropriately and you can only do that through trust. Going back, unfortunately there are individuals that don’t want to disclose information. You can get a medical report from their GP, it’s a really tricky one, but it’s important that people are open.
Regina McEvoy: I think it’s down to the line manager and employee relationship. If the organisation has a wellbeing strategy, and if you have a culture where people find it easy to discuss with their line manager, if you have a good relationship with the manager you can tell them why you’re sick, but if you don’t then you won’t tell them.
It seems that employers need to be more forthright in their relationships with employees, and there are policies, contracts and legislation.
Chris Moore: If employees are not performing in their job, because of ongoing lifestyle related health issues, you do have a disciplinary procedure.
Titi Olusanya: You must strike a balance between being the caring employer and just being an employer full-stop. If you start saying to people “we want to help and support you” it’s going back to the old personnel kind of relationship, as opposed to where we’re now as a business partner. In most cases, absenteeism is due to genuine illness, surgery, a stroke, or cancer. These people need to go back to work, So it’s to everyone’s advantage for the employer to care, to recognise the person has had a major issue, and that their return is important, because they are a valued employee. There is a danger of looking at it from a potential disciplinary point of view and until sickness absence policy works with the health and wellbeing policy, there’s always going to be potential for mishandling and misinterpretation.
Howard Hughes: Most of us will have experienced a colleague with illness that reduces their capabilities. If you make the right provisions to assist them, they become the most enthusiastic supporter of your organisation and an advocate for your healthcare policy.
What about managing the healthcare of an increasingly remote working organisation, where people are less frequently in line-of-sight?
Regina McEvoy: It’s challenging! We have editorial reporters everywhere, including war zones. Of course, they have to know their wellbeing is looked after, and they have someone to talk to. I think that Reuters have done a very good job here and we have counsellors that can be deployed if situations arise. Regarding home-workers, I think only time will tell. Yahoo’s recent decision to return to a more conventional workplace pattern, was an interesting development.
Rogier van der Werf: It’s important for employees to work from the office on a regular basis. The office is where people meet, information is shared and where creativity flows which, in my view, aids productivity.
It’s a bit impractical for employers to visit people’s houses to check if the office chair is at the right height.
Claire Douglas: Many people overlook the potential harm that working at a computer can cause if the set-up isn’t correct. It can actually lead to permanent disability that can prevent a person continuing to work. So, it’s a serious consideration. Most companies will have a policy on homeworking, but the problem is, a lot of people aren’t officially recognised as homeworkers. The amount of time they work from home may not equate to the official corporate understanding of ‘homeworker’. Businesses must be careful to cater for this more fluid workforce. Recognised homeworkers are typically well catered for in terms of equipment provision. Additionally, companies can set up an online DSE risk assessment that enables employees to healthcheck their own working station.
Chris Moore: Agile working is becoming a lot more prevalent which is great for employees’ work/life balance. But it does have practical limitations. Using a desk that somebody else has previously used is a bit like getting into a car that’s been driven by another person. Adjustments need to be made to feel comfortable. So, it’s important that workplace areas are flexible and adjustable if an agile working policy is adopted.
Let us now look at the future of PMI, in consideration of cost and as a sustainable and equitable benefit in today’s workplace.
Chris Moore: It needs to be more inclusive, and the key message is that private benefit should be less a benefit for senior managers and more a business tool to integrate with, and fund, healthcare, in order to keep people in work or get people back to work. Talking of flex, We have discussed the ageing workforce, and they will access healthcare through flex and cost the scheme more, and have more illnesses. But you need to keep them at work, as much as younger people with stress-related or sports injuries. All that needs to be funded and, as to whether health is a sustainable benefit, the fact is costs rise in healthcare and medical inflation – it runs between eight and 12 percent – and that cannot be sustainable.
Kirsty Povey: We previously offered PMI through flex, but we had to withdraw it, because the cost was so high for us. The people who were choosing the benefit were people who needed it and used it and consequently, the cost of providing it as a benefit was more than the individuals could secure privately, so we had to withdraw the benefit. We are now two years down the line and have hired another 250 people and not having PMI has not been an issue for us. It has not negatively impacted on recruitment, nor has it increased turnover. Any benefit we offer has got to be of benefit to the business. John Picken: The perception is that PMI is expensive, but each organisation is different and will have a different rationale for buying it. Originally, it was introduced as a benefit to get around statutory pay freezes, but now it’s much more of a strategic purchase, and employers really need to understand why they are buying it and the downsides of not having it. These would include; all the direct and indirect costs of absence and the negative impact on employee attraction or retention. There are other mechanisms for accessing prompt treatment, including self-funding, but Government doesn’t offer any tax relief, which is a nonsense.
Howard Hughes: In terms of the cost of PMI, medical inflation is very high and going up yearly. It may remain an affordable benefit, but we have to look at why organisations buy PMI and it has to be more than just the perk benefit element. If it is about getting people back to work, what are the alternatives to PMI which are more affordable?
Kirsty Povey: When you have the entire workforce covered the costs are spread out. We did recently look at bringing PMI back in and we had a budget for this, but we asked if people wanted to buy PMI or an increase pension contributions and people chose their pension.
Chris Moore: The PMI market for large companies is stagnant, where the differentiation occurs is where organisations are tailoring it for their specific requirement, as opposed to an off-the-shelf product, hoping that fits. PMI is consultant lead and there is no prompt access that might be helpful before you have to go off ill. It’s something we’ve thought about, changing the structure of PMI, and keeping people at work through more immediate intervention.
Kirsty Povey: We are seeing more support and intervention from our IP provider. They are focussing on education and awareness of health and mental wellbeing issues, educating and support
Is there a size issue here, the PMI market is quite saturated, so what size organisation works best with healthcare trusts?
Chris Moore: Our standard answer is that doesn’t matter. The reality is, it is a philosophy within the business due to risk, the reality is you need a big pool of claims to make itself funding, if you have a large claim you need it to not upset everything. If you have one cancer claim that costs £20,000, it might upset the amount of smaller claims. However, you may have a large amount of employees you are more likely to have bigger claims. It is about size and ensuring, because you’re self-funding, that you are able to manage the risk. The obvious saving is on premium tax, and the reality is when you take into account other insurance overheads, you’re looking at a saving of ten to 15 percent, which is a big saving to make, but it also means that if your scheme is more efficiently managed, more is saved.
John Picken: Each organisation has different health risks. The costs involved warrant proper analysis rather than just buying what others do. Employers need to take a step back and review what is in their best interests and that of their employees.
Howard Hughes: You can make structural changes, bring in a saving by going through a trust. But having said that, one thing to bear in mind is, not all insurers play sensibly all the time. You can get a good bargain, but it might only last a year. The advantage of going through a self-funded trust mechanism is that you are embedding a change that is always there.
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