Very often two similar-sized international private medical insurance (IPMI) risks with a similar employee profile, in the same territory, will attract significantly different levels of premium. Why? It’s largely influenced by company culture.
Premiums for larger groups purchasing IPMI are usually directly linked to an employer’s claims record. A poor claims record can mean high and potentially escalating premiums, yet some employers and their advisers seem to be unaware of this link.
There are cases of employees being encouraged to claim for their ’annual entitlement’ for optical care to order designer sunglasses, or staff staying in hospitals akin to luxury five star hotels for far longer than is medically necessary, simply because it is an available option.
I would not discourage anyone from claiming for medically necessary treatment – or from attending the very best possible hospital for treatment or preventative healthcare. That is what the cover is there for.
Instead I’m asking employers, through guidance and education from their advisers, to understand that the higher the level of claims, the higher the subsequent year’s premium is likely to be. Staff must claim when necessary, but for an employer to keep their premium levels under control they would need to manage their insurance scheme in such as way as to ensure that claims are only made when necessary; and for costs which are reasonable and customary. To assist employers and their advisers in this process, regular claims management reports can be provided which detail the utilisation of the benefits under the policy.
The alternative to this is to have a very high volume of healthcare claims and accept that premiums will be higher as a result. Some employers will take just that attitude because they would prefer not to challenge their employees on the costs incurred on the basis that healthcare benefits are among the most valued by expatriate staff. For employers deciding on this approach having regard to all the factors, this is fine.
They will understand why their premiums may be higher than an employer taking a different approach to claims management.
I’m asking employers, through guidance and education from their advisers, to understand that the higher the level of claims, the higher the subsequent year’s premium is likely to be
For employers who are keeping a sharper eye on the bottom line however, understanding the impact of claims on international private medical insurance premiums and taking steps to manage claims could pay significant dividends. Here advisers can also play an important role; employers will be grateful if their adviser helps them to mitigate premiums and control costs. The benefit utilisation reports provided can also be an invaluable tool in this process.
Every employer will have their own approach to managing the medical claims process: The key is not to stop staff making a claim when it is necessary, but to ensure that only necessary treatments and benefits are utilised at reasonable costs. Human resource managers should be aware that in many countries medical facilities are highly commercial operations. They make more money if they can treat an employee as an inpatient rather than a day patient. They can also make more money by performing several extra tests, where one would suffice. It is of course a tricky balance for employers – they do not want to appear mean – or to give the impression that they are putting money before their employees’ healthcare. However, imbuing a culture of cost containment and keeping an open mind to the potential of overtreatment by some medical providers, will work wonders for managing costs. Think also about the type of hospital chosen for treatment. Some private hospitals offer five star accommodation, yet the treatment received and results achieved will often be no different from an alternative local hospital offering ordinary accommodation.
Knowing that first-rate hospital treatment, access to clinics and if necessary, medical evacuation to a centre of excellence is available at all times, is an important reassurance to staff. It is also essential for employers, if they are to ensure that their expatriate workforce is focused on doing their job rather than fretting about medical care. But by managing the claims process and instilling a culture whereby employees do not see the company’s medical insurance as a benefit to be exploited but rather a protection in time of need, employers can help themselves to mitigate the cost of cover.