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The industry is in dispute over whether health and wellbeing can reduce PMI premiums. John Greenwood reports

Do health and wellbeing programmes actually make people healthier? Providers who offer the programmes would obviously argue that they do. Whether that translates through to lower PMI premiums is debatable, however.

A recent research trip to the US has led Rachel Riley, managing director at WPA Protocol, to declare that what works over there does not necessarily work on this side of the pond.

Speaking at a WPA Protocol event in London last month, Riley said: “My conclusion having reviewed the US market is that investing in health and wellbeing won’t reduce private medical insurance premiums. Companies should not expect that to happen.”

One of the frustrations of proponents of health and wellbeing in the UK is thelack of an evidence base to push their case. Most evidence of positive outcomes for health and wellbeing, in particular with regard to reduction in healthcare costs, originates from the US, but as Riley argues, this is because US companies are far more exposed to the healthcare costs of their staff. “In America the employer is picking up 100
per cent of the cost - in the UK the figure is just 30 per cent,” says Riley.

Paul Moulton, sales and client relationship director at Axa PPP Healthcare, which has a health and wellbeing operation in its ICAS arm, agrees that employers should not be led to expect lower premiums as a result of setting up a programme. “In the short term I would agree with Rachel’s proposition. If you put a health and wellbeing programme in today, you are not going to get cheaper PMI premiums.

But over the longer term we would expect it to have an impact on a range of conditions. So in absolute terms it will have an impact, but that will be very hard to measure. But then is this the right question. If you ask employers why they put in health and wellbeing arrangements then they will not say they are doing it to reduce their PMI costs. They are doing it to improve employee engagement, raise the health of their staff and improve productivity at work.

This is a point made by Dame Carol Black at the WPA event last month. She said: “Yes the evidence is US-dominated, but that does not mean there is no read-across to the UK.” Black said that while medical care and pharmaceutical costs do not apply in the UK to the sameextent as the US, these represented only 30 per cent of the total return on investment from health and wellbeing programmes. Basing her argument on an interpretation of a 2009 US National Business Group for Health report, she said the other 70 per cent, which included absenteeism, overtime, temporary staffing, admin costs, replacement training, off-site travel for care, customer dissatisfaction and variable quality, was transferable to the UK.

Discovery Health and PruHealth on the other hand argue that there is a strong correlation between member engagement in incentivised health
programmes and low hospital admissions.

They have just published a retrospective study over five years of more than 300,000 participants that shows active members had decreased hospitalisations and claims costs.

The findings of the report, based on data in South Africa, reveal that members who remained highly active had a significantly lower probability of hospital admission, and lower hospital admissions costs if they were admitted compared with those who remained inactive.

In the survey, those who became more active had significantly lower probability of hospital admission, and lower hospital costs if admitted, than those who maintained their current status - hospital costs were 6 per cent lower in those members who moved from being inactive to active, and 16 per cent lower in those members who were active throughout the study compared to those members who remained inactive.

The increased frequency of gym visits was associated with a lower probability of hospital admissions - two additional gym visits per week reduced the chance of admission by 13 per cent.

If you ask employers why they put in health and wellbeing arrangements then they will not say they are doing it to reduce their PMI costs

PruHealth spokeswoman Dr Katherine Tryon says: “We can now show that a comprehensive, incentive-based health promotion programme translates into positive benefits for both individuals as hospital admissions are reduced, and for the PMI industry as lower hospital admission costs are subsequently generated.”

But for Riley, reading evidence from one company to another in the UK is problematic enough, let alone comparing internationally. She says: “Some companies are proving return on investment, and are doing health and wellbeing well. Royal Mail is one and BT is another. They can prove a return on investment for their own particular circumstances. But what is lacking is a more academically rigorous study. Just because a case study works in one country does not mean it works in another.”

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