The word “choice” is muttered frequently at the Best Health offices; something you would expect from any independent adviser.

Specialist PMI intermediaries would cease to prevail without enough market and product choice and I can’t help but feel unease at the PMI market shrinkage, most of which is due to insurer consolidation. We are keen for innovation in this sector from existing or, even better, newcomers to the PMI market. I would applaud another ’Prudential’ developing their version of ’PruHealth’ but I imagine that the average non-specialist adviser feels there is enough choice in the market.

Many IFAs will write a PMI policy only when asked. I know only a relative handful of IFAs that are experienced enough in PMI to be able to compare the market for their client and all too often I hear stories of clients being offered Hobson’s Choice.

When I first started working with IFAs, I noticed that if they had already set up a PMI policy for their client, more often than not it was placed with Standard Life, now Pru-Health. Either way, the client would usually end up with a PMI policy that had not been compared with the rest of the market.

Looking in more detail at the PMI insurers in the market, the last 10 years has seen a huge shift to more “options” based policies. Throughout this recession it has been useful to offer clients alternatives from their existing insurer to help reduce premiums at renewal. We now have the flexibility to, for example, remove psychiatric cover or therapies or impose an outpatient limit.

This is especially important where a client cannot switch insurer due to, for example, an ongoing cancer-related claim. In previous recessions, we wouldn’t have had these choices to offer clients. The downside of too much choice is that clients can find it very confusing. However, a good adviser will conduct a thorough enough fact find to help them build a plan for their client without having to present too many confusing choices.

Many IFAs will write a PMI policy only when asked. I know only a relative handful of IFAs that are experienced enough in PMI to be able to compare the market for their client and all too often I hear stories of clients being offered Hobson’s Choice

While I believe choice is good for the client, it can be difficult for advisers when comparing policies. A recent review we conducted for a client insured with PruHealth left them having to choose between a plan that had been heavily used for its subsidiary benefits, against a plan without this option which was a lower cost. The financial director had a difficult job telling his staff that they would no longer obtain their Cineworld or Eurostar discount. However, we had presented a 25 per cent saving with another insurer that offered similar medical benefits but without the aforementioned discounts.

The PMI market wheels have been slowly turning and trying to come up with a palatable solution to reducing premiums whilst still offering quality cover. Recently, cash plan provider Westfield Health launched a product promoted as a low cost alternative for quick access to private surgery. Cash plan providers seem to have spotted the opportunity for the middle ground that some companies are looking for.

Bupa has created a lot of discussion and controversy by introducing its Open Referral scheme. Many feel it is very risky to take away the freedom of choice of the customer or their GP to choose their own specialist. Whether Bupa have made a sensible move remains to be seen. I don’t think Open Referral would ever be accepted by individual clients, but with corporates and larger SMEs, why not?

Where the employer is paying the premium, their motivation is usually for their employee to get better quickly and get back to work. Do they care if their employee sees the consultant their GP recommended? Do they care if they get a discount on their Eurostar or Cineworld ticket for that matter?

Interestingly, GPs don’t always know who the best specialist is for their patient and OFT research showed that some base referrals purely on social contact. Bupa would be very sensible to consider the Open Referral system as another price reduction option rather than forcing customers into a scheme they don’t necessarily feel comfortable with. I see the Open Referral concept as a potential sea change which could be picked up as the norm by other insurers. However, it has to be embedded slowly so that the changes can be embraced by the customers.

In summary, each PMI insurer itself has more choice amongst its range of plans than ever before and this has only been widening over the past 10 years. I hope that in 2013 we will be welcoming some new insurers to the market and that our market leaders continue to innovate and pave the way for PMI to thrive.

Welfare reform and wellbeing can prove fertile new ground for cash plans says Sam Barrett

Welfare reform is pointing to a larger role for employers in safeguarding employee health and wellbeing. But, while the group risk and medical insurers are preparing for increased interest in their products, cash plan providers, with their low cost health and wellbeing product propositions also stand to benefit from the shift.

“As the NHS changes and more responsibility passes to employers to look after their employees’ health and wellbeing, cash plans will evolve,” says Lara Rendell, marketing manager at Health Shield. “We’ve always looked to complement the NHS so wherever there are gaps in provision we will explore how we can fill these.”

While some of the innovation on cash plans will be driven by a squeeze on NHS services, finding a way to improve employee health and wellbeing has benefits for employers too. A healthy workforce is more productive and takes less time off. Employees also tend to suffer fewer serious conditions that can result in long-term absence.

Roll-back of the NHS is a demand that Westfield Health is clearly looking to meet with its Hospital Treatment Insurance, which starts at £1.24 per-employee per-week and which focuses on in-patient care, covering more than 1,300 surgical procedures. The provider expects others will follow its move into the middle ground between cash plans and PMI.

And cash plans are in a good position to support an organisation’s wellbeing strategy. Unlike group risk benefits or medical insurance, claims frequency is relatively high. Most employees can claim at least once or twice a year, with many able to use their plans much more regularly. Usage is increased by some of the peripheral benefits. For example, BHSF and Medicash include an employee discounts and savings programme on their corporate schemes, giving access to a range of discounts on everyday items such as supermarket shopping, eating out and gym membership.

Debbie Kleiner-Gaines, managing director of Best Health UK, and a spokesperson for the Association of Medical Insurance Intermediaries, is a fan of these discount and savings programmes. “I like the idea of being able to obtain non-medical discounts though cash plans, for example gym membership. It can encourage employees to use the other benefits,” she explains.

Furthermore, the low cost of cash plans means they can be provided across the workforce rather than to a select few, which can often be the case with medical insurance.

This means that everyone, including lower-paid employees who might not be able to afford to look after their health as thoroughly as they should, can benefit.

Cash plan providers are arguably more highly trusted than the providers of other products too, in part because of their heritage as community-based organisations set up on a mutual basis, which can help them to build a rapport with employees. This can enable them to have a greater influence when it comes to encouraging employees to make lifestyle changes.

As Howard Hughes, head of employer marketing at Simplyhealth, explains: “Cash plans are very trusted by employees. We’re set up to pay claims quickly, which reduces our administration overheads but also means the claims process is hassle-free for employees.”

Encouraging employees to get their health checked out can lead to medical conditions being spotted earlier than they otherwise would have, which may mean an employee is able to get better and back to work quicker. A healthy workforce leads to better results all round

Cash plans are also well-established when it comes to offering health and wellbeing options. Over the last few years, wellbeing benefits have grown in popularity and a broad range of options are already available either as an integral part of a plan or as a low cost extra.

Several cash plans, including those offered by Health Shield and Westfield Health, include an online health risk assessment. These take details such as height, weight, blood pressure and cholesterol readings to give the employee an overview of their health and details on how they can make improvements.

Although a criticism of these assessments is that only those employees who want to improve their health use them, Paul Shires, sales and marketing director at Westfield Health, says they can drive significant change. “We encourage employees to engage with our health risk assessment on a regular basis, flagging up pharmacies where they can have further tests done and giving advice on how they can improve their health and lifestyle. Employers can also purchase a variety of upgrades such as onsite biometric testing, which can help to bring the assessment to life,” he explains.

Another benefit of the health risk assessment is the management information supplied to the employer. This is anonymised, but by giving company-wide scores can highlight areas where improvements could be made. “Many companies either don’t have a health and wellbeing strategy or implement initiatives in a random way. This management information can help them target their strategy to make it more effective,” Shires says.

Taking this a stage further, many corporate cash plans include a health screening benefit. For instance Simplyhealth’s £1 a week plan includes £100 for health screening while you can get £120 of benefit for £1.75 a week on Health Shield’s

Employee assistance programme are another common wellbeing feature. These are available free from Westfield and Healthshield, while other providers, including Medicash and Simplyhealth, prefer to charge a separate fee for it. For instance, on its Proactive plan, Medicash charges an additional 15p per employee per week to include an EAP with up to six face to face counselling sessions.

Simplyhealth also charges 15p per employee per week. Hughes explains the thinking behind the fee. “We think it’s important to charge for it as it can be a very valuable benefit that meets employer’s duty of care requirements. By charging for it, it helps to highlight it too and this ensures that it’s promoted and used.”

Some providers also include a specific health and wellbeing benefit. For instance, on Health Shield’s Essentials corporate scheme, employees have access to an annual health and wellbeing benefit of £70 on the 75p per week plan. This can be used towards a range of treatments including aromatherapy, Indian head massage and Reiki, where it is provided by a practitioner who is a member of an approved professional organisation.

Other wellbeing benefits include GP helplines, Best Doctors’ second opinion service, health and wellbeing information and gym membership discounts.

New benefits
There is also potential for further growth in wellbeing benefits on cash plans. Brian Hall, sales and marketing director at BHSF, says there will be a couple of influences on cash plan development in the next few years. “The growing emphasis on employers’ responsibility for their employees’ health coupled with the growing cost of medical care and the consequential rise in medical insurance costs will be the biggest influences on the development of cash plans going forward,” he says. “These influences will see a variety of new initiatives being introduced on plans.”

According to Hall, these influences are likely to see more diagnostics and testing being added to plans. These will help employees identify health problems quickly, while also bridging the gap in NHS provision.

He also believes that the focus on employers’ responsibility for their employees’ health will create a closer alliance between occupational service provision and cash plans. This will enable employers to access the services necessary to help employees who are suffering health problems as well as drive more health improvement initiatives.

But while these new benefits will add value to cash plans, Hall says this will have other ramifications. “As claims in areas such as diagnostics come through, the downward spiral in employer-funded policy costs will cease and price will start to firm,” he says. To counter this price rise, and to reflect the growth in wellbeing benefits, a stand-alone wellbeing product could be launched. This could incorporate support and helpline services alongside more motivational benefits that engage with employees and encourage them to adopt a healthier lifestyle.

However, the cash plan providers are reluctant to spin these benefits out separately. Shires says that it is possible to build such a product through Westfield’s Mosaic, providing it includes at least two core benefits, which are optical, dental, consultation, therapy treatments, but he doesn’t believe that such a plan would have mass market appeal.

“The core benefits are important in a health and wellbeing strategy. Cash plans exist to pay claims quickly and efficiently and, without this, their value diminishes,” he says.

Claims pressure
But, while providers are unlikely to launch standalone wellbeing plans, adding more of this type of benefits to a cash plan could have an adverse effect on claims. With employees more engaged in their health they are more likely to seek medical treatment and, as this can be obtained on a cash plan without the need for a GP’s referral, it could mean that claims spiral.

The providers insist the potential for increased claims isn’t an issue. “We want people to use our plans and we actively promote them to ensure this happens,” says Rendell. “If someone looks after their health, it can prevent a much bigger claim further down the line.”

Dental treatment is a good example of this. Regular check-ups can spot the early signs of problems, including mouth cancer, allowing the employee to take preventative action.

Kleiner-Gaines doesn’t believe increased claims frequency is a negative either. “A healthy workforce leads to better results all round,” she says. “Encouraging employees to get their health checked out can lead to medical conditions being spotted earlier than they otherwise would have, which may mean an employee is able to get better and back to work quicker. A healthy workforce leads to better results all round.”

Published in Corporate Adviser – 1st May 2012

This is the first time the Association has had a Senior person from such a large company in the Chair position and I am confident that this move will be positive for AMII.

I will continue as Treasurer and am delighted that Brian Walters has been appointed as Vice Chair, Sue Smith and Stuart Scullion as Executive Committee members and Liz Nualls from Aviva as the Insurer Representative.

Exciting times ahead for AMII which I am glad to be part of .

AXA intends to use Health-on-Line’s IT expertise to develop lower-cost cover, in a bid for growth by attracting new market entrants. The deal also enables Health-on-Line and AXA-PPP healthcare to accelerate promotion of lower-cost modular products for UK-based individuals and SMEs.

As reported in Cover Magazine commenting on the acquisition, AXA-PPP healthcare chief executive Keith Gibbs said: “Health-on-Line, as well as being a well-run, profitable business, is closely aligned with two core areas of AXA-PPP healthcare’s strategy.

“Whilst we already have significant market share in private medical insurance, Health-on-Line will enable us to develop more affordable options – which will be aimed both at consumers and at the micro/SME market.

“Initial sales of our AXA PPP Select and Health-on-Line Priority Health modular products look very promising and the offering seems to be attracting customers who are new to private healthcare, which was our intention”.

Best Health won the Top Appointed Representative award for the 3rd year running and breaking convention, dragged some of the Best Health team up on stage to collect their award.

We are delighted to have received this accolade once more and continue to strive to provide the highest possible levels of customer service and advice.

The latest contention relates to one of our clients who is due to renew her small company scheme in March. We introduced this client to Aviva last year but they received their renewal documents before we did. (Fail!) The client called Aviva to tell them she was planning to cancel (as the business was being sold). She was transfered (incorrectly) to the Direct Telesales team and they quoted her for the members to leave the group and take up individual schemes.

We have a process in house whereby we chase renewal documents and call the client to keep them informed 6 weeks before renewal. Luckily, we spoke to the client only a day later and she explained what had happened.

The lesson is that we are right to follow a process where we chase insurers as early as possible for documents. We are also right to contact our client as early as possible.

Now – what about the wrongs!

Aviva should have a system in-house where a direct sales person immediatly hands the client over to the intermediary team. They should never communicate with a client that we have introduced to them. They should also ensure that we receive their renewal documents before the client does!

We are now in the process of unraveling the situation and have had to involve the Direct Sales Team Manager as well as our intermediary contact.

Cash plans are becoming more and more popular with our clients. They are an excellent way of keeping claims down and thereby reducing premiums at renewal. Employees can claim for out-patient treatment on the cash plan reverting to their Private Health Insurance once they have reached their limit or if they need in patient treatment.

A health cash plan can help employees to stay healthy every day by providing access to valuable services and cash benefits towards the cost of their routine healthcare.

Employees can claim money back towards essential health costs such as eyecare, dental treatment, physiotherapy, diagnostic consultations and much more! They also have access to quality health and wellbeing services to complement the cash benefits.

And whilst their employees enjoy the benefits, your clients can enjoy the rewards. Introducing a health cash plan could help them to:

• Reduce absenteeism and related costs
• Recruit and retain staff
• Improve staff morale, motivation and productivity
• Lower the risk of musculoskeletal litigation in conjunction with a robust stress policy and line manager training
• Play an integral part of your clients’ health and safety policy
• Provide a valuable employee benefit package
• Encourage pro-active employee healthcare

Health cash plans are:
• Simple and reliable
• Affordable and alternative healthcare options that can complement PMI
• Easy to introduce and administer
• Cost may be offset against corporation tax

2011 Autumn launch summary

By David Priestley

All of us are faced with some complex challenges in our efforts to build successful businesses and a successful PMI market. The pending NHS reforms help our cause as serious concerns emerge about future provision among consumers and employers. Despite budget pressures, there also continues to be an increasing importance placed on health and wellness across the spectrum. So why are we seeing customers leave the market and why are we failing to attract new customers in large numbers?

Albert Einstein famously defined insanity as “doing the same thing over and over again and expecting different results”. Maybe it’s time to try something different if we are to turn things around and start generating some growth in the market? Certainly, we shouldn’t just sit back and wait for the economy to pick up. With all that’s going on globally and in particular in the European economies, we should plan for a prolonged period of slow growth.

We think it is good to try something different..
This backdrop lends more weight than ever to PruHealth’s strategy. We feel passionately that to hang on to the customers we have fought hard to secure, and to attract new customers into the market, all PMI customers need to see much more value in the product they are purchasing. What better way to do this than to tap into the huge demand for healthy lifestyles and in a way that provides incredible financial benefits along with the peace of mind that PMI has always offered.

We do this through our impressive wellness programme..
That’s why Vitality is so important not just to PruHealth, but to the market as a whole. I think it’s fair to say that we have shrugged off the cynicism and competitor criticism suggesting that Vitality is a marketing gimmick. Not only are we able to demonstrate the impact Vitality can have on lifestyle choices and health risk cost through highly regarded academic research and numerous expert assessments, but most other PMI providers have begun to follow our lead. As Discovery has expended its global footprint and increased the sophistication and scientific understanding of wellness, Vitality has become recognised as the worlds leading incentive based wellness programme.

We now have even more product and Vitality enhancements..
As we begin the roll-out of our powerful new product and Vitality enhancements, the benefits and the broad appeal are impossible to ignore. We believe that we are creating a new category of PMI. One that can help us all to achieve improved customer retention, and the growth in our businesses and market that we strive for. Our high quality PMI remains at the heart of what PruHealth offers, but much more than that, we help our members understand their health, make it easier and cheaper for them to get healthy, and motivate and reward them with cash and incredible discounts from a range of leading leisure, travel and communication brands. In short, every single PruHealth member will be able to benefit from real tangible value every year, irrespective of whether they need to claim or not.

Insurers need to do more to ensure that private medical insurance (PMI) remains affordable as clients get older and the NHS struggles to meet their needs, according to intermediaries and insurers.

Advisers have told Health Insurance that more could be done to help people fund private healthcare into their 60s, when they are more likely to need hospital care.

“We need constant innovation to invigorate the market,” said Debbie Kleiner-Gaines, managing director of Best Health UK. “We need to create reasons for people to talk to advisers and stimulate the medically insured to be inquisitive.”

Nick Jones, brand and marketing manager at Exeter Family Friendly, agreed.

“We need to put in place more flexible solutions that work with and complement the NHS, but also do so affordably,” he said. “Improving medical treatment and developments in expensive drugs has put pressure on PMI premiums. We need to find solutions to this by helping break cover down, so older customer can select what’s important to them; but not at the expense of clarity.”

NHS concerns

A “large proportion” of Kleiner Gaines’ clients are over the age of 60 and she suggested that they were motivated to take out PMI due to concerns about the level of care they might receive in the NHS.

“This is mainly due to the fact that they have had enough life experience to know of friends that have had terrible treatment and waited for treatment,” she said.

Damning reports exposing poor standards of elderly care in the NHS have hit the headlines in recent months. An investigation by the Care Quality Commission uncovered a culture that “allowed unacceptable care to become the norm, where it should have been an exception”.

Brian Walters of Cheltenham-based intermediary Regency Health, reports that half of his clients are aged over 60 and often cite concerns about hospital-acquired infections (HAIs) and the possibility of shared wards in the NHS.

“We have seen a recent trend for older people entering or returning to the PMI market citing concerns about the NHS, but these concerns tend to be expressed in vague terms,” he said.

Although rates of HAIs have fallen to a record low, the elderly are more at risk. Most cases of MRSA and C.difficile are reported in patients aged over 75. The NHS has also made progress on eliminating mixed-sex accommodation, although patients may still stay on mixed-wards.

Policy design

While various tools can be used to reduce the cost of PMI, advisers warn that not all are appropriate for older age groups. Walters believes that premiums contingent on high no-claims discounts are “particularly unsuitable” for older clients because “they are more likely to claim in successive years and are more susceptible to getting ‘locked in’ to a single insurer”.

Exeter Family Friendly’s Jones also questioned the relevance of no-claims discounts, particularly for older clients.

“They can act as a disincentive to claim at the best of times, but at this age an early savings could soon be rendered useless for people over 60,” he said. “Choosing a provider with a good reputation for providing an empathetic and personal service is also important and may be increasingly so for older customers, who are more used to a personal service and indeed demand it.”