Vital signs
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Prevention is better than cure a clich矢ut clich豠are clich豠because they are fundamentally true.
Yet the whole health insurance debate for the corporate market is structured around sickness.
Most employers buy private medical insurance to offer their staff quick and effective cover if they become ill. The language
of most insurers concerns disease, cure and rehabilitation.
But the industry could be missing a trick. Corporate investment in health and well-being is rising and so are the expectations of employers and their staff.
Being healthier reduces the frequency, incidence and likelihood of sickness, which is crucial for employers and lowers the chance of complications during treatment and improves recovery times.
From a PMI point of view, it is in everyones interest to have a pool of healthy people buying insurance. For the employer, it helps keep people at work and keeps down the cost of claims and staff benefit from being healthier.
But how can companies encourage their staff to be healthier? PMI can have a significant role to play in keeping people healthy.
The PMI provider can offer incentives. Broadly speaking, there are six different aspects to staying healthy the medical side any conditions or treatments needed, physical activity, nutrition, smoking, alcohol and stress.
If a PMI provider can encourage people to do all these manage any medical condition they have, eat healthily, take more exercise, stop smoking, reduce alcohol intake and levels of stress then there are benefits for all involved.
This approach has proved successful in the South African and US markets and it is the next logical step for the UK PMI market for corporate and individual cover.
We call it the Vitality model, with scheme members earning points for healthy activities and these points, combined with claim levels, can translate into lower premiums, which helps with risk management and is sustainable.
This type of scheme is attracting new people to the PMI market and it is causing people to change their behaviour. Over a third of members of this type of scheme say they have taken steps to become healthier to earn points.
In the corporate context, healthier staff mean fewer claims and potentially reduced premiums.
Employees also benefit from rewards by way of cashback or money to be put towards treatments not normally offered by PMI, such as private GP access, maternity-related costs and routine health screens. Offering incentives to people to do healthy activities is also a question of removing barriers to entry that is, making them cheaper to do in the first place.
By creating partnerships with companies and organisations which provide access to healthy activities, such as gyms, smoking-cessation courses, and nutrition partners, a PMI provider can offer this access to clients on a discounted basis and encourage more people to join.
The benefits are clear of an innovative incentive-based approach to PMI based on well-being. Employers have peace of mind that their staff will have best-in-class cover if they are sick and, crucially, companies can also reduce their premiums by encouraging their staff to be healthy.
Employees benefit from discounted health activities, such as cheaper gym membership, and the chance to be rewarded financially, or with broader cover, for doing healthy activities.
The drive towards healthier living is part of a broader picture. This is illustrated by the recent launch of the Department of Healths Small Change, Big Difference campaign, led by Tony Blair and Patricia Hewitt to promote the value of making simple steps to achieve a healthier lifestyle.
Until recently, this health drive has been in the context of a relatively stagnant PMI market.
The focus on sickness by traditional PMI providers means their costs increase, often quite dramatically, year on year, particularly as a person gets older, which can get expensive for employers.
By offering incentives to keep staff healthy and discounted membership to healthy activities, an incentive-based approach helps employers keep the incidence of claims lower and could help them bring their premium down. It also helps keep the workforce healthier and at work.
Encouraging wellness is simple but effective and is the future of the corporate healthcare market.
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