The corporate private medical insurance (PMI) market is poised for growth as the pandemic has triggered significant expansion from organisations who “finally understand” the value of health benefits.
However, the industry still has plenty of work to do with issues such as single rate schemes which it is argued are limiting uptake among younger employees and reducing the effectiveness of workplace health strategies.
Speaking at the Laing Buisson Private Healthcare Summit, WPA executive director for large corporate business Brian Goodman noted how significantly Covid had accelerated corporate thinking around health and wellbeing.
“Four or five years ago a lot of PMI was about providing secondary care with a few care pathways popped on the side and maybe some ancillary services,” he said.
“That has really changed over last couple of years and we’re really seeing a change in the health and wellbeing strategies of organisations.
“People are looking for wider packages and those need to joined-up to meet the direction the company is trying to achieve.”
Demand for talent
Bupa B2B marketing director Daniel Sullivan agreed and highlighted that the current drive for talented employees was causing a surge in demand.
“We did an SME customer panel and one leader said: ‘I’ve never bought PMI before but I need to buy it now because I’m losing people to corporations with their health and wellbeing benefits,” Sullivan said.
“So that’s somebody not buying it for the classic productivity reason, they are very clearly buying it because of the new dynamic around talent in the UK.”
Bigger priority than ever before
Howden head of benefits strategy Steve Herbert was equally positive about prospects for the corporate healthcare market, and believed the greatest gains were likely to come from smaller employers.
“There’s loads of opportunities for the private healthcare market,” he said.
“Employers finally understand why they should be doing this. The growth area of the corporate healthcare market is almost certainly with smaller employers – where if they have it in place typically it will only be for senior employees.
“But they need to have it in place going forward because we’ve got the NHS waiting list that already has six million people on it in England alone.”
Herbert noted that meant people would be waiting for treatment for weeks, months or even years.
“That’s not good for them, their health and their families and it’s really not good for their employer because people are either not going to be able to some of their job or all of their job as intended while waiting for treatment,” he continued.
“So helping people get private medical treatment suddenly becomes a bigger priority for employers than it’s ever been before.”
Single rates blocking young members
WPA’s Goodman also highlighted areas the industry needs to improve to meet the demands of employers and their workforces.
He called on the sector to help businesses bring younger members into the scheme, suggesting a two-tier approach was suitable.
Goodman noted that at the moment most large corporate schemes operate at a single rate notwithstanding the age of the individual.
“So why should somebody aged 20-25 who probably needs access to dental, optical, some physiotherapy, be hampered by paying the P11D rate for somebody aged 60-65 in a senior level of the scheme,” he said.
“Most companies do say one of the biggest problems they have is attracting young people into their scheme, well its hardly surprising.
“So they should be looking at having a more tailored scheme, perhaps different age bands or lower levels of benefits with things that young people are going to want to access like mental health and wellbeing.
“They can be provided in a very cost-effective way and I think that’s a very big opportunity for corporates and our market to grow.”
Goodman argued that once people are in the scheme, see the benefit of private healthcare and have families of their own, they would be much more likely to take up a full PMI offering.
Data insight needed
And the need for employers to be able to analyse their scheme performance and data is also a critical development.
“Companies are looking for improved analytics,” Goodman continued.
“Gone are the days when they wait six weeks for an update from their insurer which has got some pretty flat data in it telling them what the scheme is doing.
“That’s no good, they need something accessible 24/7 where they can do their own queries in what is going on the costs of their healthcare scheme.
“PMI has historically been pretty poor at trying to work out the return on investment for corporates, how that works and what things are doing in that basis.”