Last year UK GDP fell by 4.9 per cent following the global recession.
As a result, consumer spending has understandably followed suit, with both companies and individuals becoming far more price conscious and looking for tangible value for money. But when it comes to healthcare, it is important to ensure that a return on investment is not confused with unsustainable price cutting.
There is currently a dangerous balance in the private healthcare industry, with the price of insurance premiums trending downwards as a result of the drive to remain competitive, while the cost of healthcare continues to rise above the rate of inflation due to advances in technologies and drugs. This presents a threat to customers, as costs are cut in seemingly subtle ways such as reduced servicing, resulting in less subtle effects on customer satisfaction and ultimately on outcomes.
Private healthcare is now at a tipping point with two very different possible courses of action. On the one hand, we are seeing price cutting delivered by reducing the value of the benefits provided. This commoditisation becomes insidious and undermines the return on investment that employers receive from their health insurance. If there is one thing that is not a commodity it is the health of ourselves, our children and our employees. On the other hand we, the industry, should reinvent our approach by working with companies to develop their understanding of the wider health solutions available to them which will enable them to weather the recession with a stronger workforce and achieve a healthy return on their investment. There is much work to be done to avoid the commoditisation of healthcare.
Providers must enable employers to unlock the true value of workplace health initiatives by helping them understand what is of most benefit to them and their employees and providing tailored solutions to deliver results. By removing options that are of no tangible importance to employees and replacing them with those that add real value, we create a win-win opportunity, as the employer is able to find an effective lower cost solution and we are able to continue to offer an affordable price in a sustainable fashion.
The Confederation of British Industry has calculated that UK industry looses a massive £17bn per year as a result of workplace absence. Conversely, Bupa’s recent report, Healthy Work: Evidence into Action, reviewed over 600 pieces of research and found that companies can expect a return on investment in workplace health initiatives ranging from £2 for every £1 spent to £34 for every £1 spent.
There is currently a dangerous balance in the private healthcare industry, with the price of insurance premiums trending downwards as a result of the drive to remain competitive, while the cost of healthcare continues to rise above the rate of inflation
Workplace health initiatives range from absence management and health promotion through to improving the quality of work. In one example in the report, a manufacturing company employing 4,000 people put in place a range of initiatives to support employees with musculoskeletal problems. The company gave their employees access to expert advice and support, prompt treatment of injuries and put in place an absence management programme to encourage early return to work. These initiatives delivered an 80 per cent reduction in the number of absence days lost due to musculoskeletal disorders. The overall estimated financial benefit to the company was £192,000 a year – based on a reduction in absence, a reduction in civil compensation claims and a more positive health and safety culture. This equated to a return on investment of 12:1.
This is just one example highlighting the strong rationale for improving workplace health. However what this example also reveals is that more needs to be done by workplace health providers to help employers understand the health landscape of their particular workplace and to implement initiatives that are of benefit for their unique situation and directly relevant to their employees. Encouragingly, our report concluded that, by investing in workplace health interventions and doing so in a way that is informed by an understanding of the health profile of the workforce, employers can help make a significant contribution to workplace productivity.
It is our job to enable our customers to better understand healthcare by helping them to make the right decision about what products to purchase and to understand how their choice can benefit their workforce directly. At a time when our customers are looking for tangible improvements in workplace health coupled with competitive pricing, unsustainable commoditisation of the industry is an option that should be well avoided.