Provision of occupational health services remains notoriously low within the UK, yet new legislation could make it an essential component of business protection. Peter Madigan reports
In recent years, employers have come under increasing pressure to offer their staff access to occupational health (OH) services and employee assistance programmes. Not only has research by the Health and Safety Executive (HSE) revealed the UK has the lowest level of OH provision in the developed EU, but new legislation has also acted to raise employer's awareness about their obligations regarding wellbeing.
Cost-effective
The poor levels of provision must be blamed, at least in part, on confusion about occupational health itself. The original definition of 'the effect of work on health and health on work' explains what OH services are concerned with, but does not adequately clarify what it is.
Occupational health encompasses a raft of services including pre-employment screening, risk management, health surveillance and absence management, so the difficulties in trying to sum up what the term actually means, become apparent.
HSE research carried out in 2002, suggested that less than 15% of UK companies had some form of OH support, this despite evidence that the average number of sick days taken due to work-related illness almost doubled between 1995 and 2001. Appropriate OH support has proven itself to be cost-effective in reducing absenteeism, increasing productivity, and reducing sick pay costs. Why then are employers failing to invest in such services?
Dr Jenny Leeser, clinical director at BUPA Wellness, says it is because occupational health service providers have taken a slow approach towards encouraging businesses to invest. In the past this tack has been seen as somewhat necessary due to a shortage of nurses and doctors in the industry. "It is because of these shortages that occupational health remains relatively expensive and in many cases employers cannot see beyond the bottom line," says Leeser.
Although cost will always be the ultimate deciding factor, Kevin Newman, senior consultant, healthcare and risk consulting practice at Watson Wyatt, says employers must be made to think of OH as an asset rather than an expense. "Market growth can be encouraged by in-house occupational health services building robust case studies that show occupational health as an investment that will see returns," he says.
There are figures already available that should encourage employers to think of OH as an asset. Work-related illness costs the UK more than £11 billion every year. The Work Foundation estimates the hidden cost of sickness, such as temporary staff and training costs, to amount to a further £4.4 billion.
Regardless of these statistics, the majority of employers do not seem to be taking heed of the preventative approach to employee health that OH services advocate. The situation may, however, be remedied by the introduction of new laws intended to make employee safety an employer's number one priority.
Legislation such as the Disability Discrimination Act (DDA) and the much-publicised success of the Government's pilot Pathways to Work scheme, have made employers acutely aware that in an increasingly litigious society, OH may be necessary just to protect themselves. "Increasing legislation will nudge the market in the right direction," says Newman, "because occupational health does not market itself very well, fear is the main driver."
"Occupational health has always been about protecting the employer more than it's been about getting the employee back to work," says Dr Michael O'Donnell, chief medical officer at UnumProvident. "Although the Disability Discrimination Act and other such legislation should cause some kind of spur in the occupational health market, this will be limited by the number of trained people in the field," he says.
The number of people employed in OH services is indeed surprisingly small. The HSE estimated that there were 7,500 occupational health nurses working in the UK in 2002; that equates to just 27 per 100,000 people. Trained occupational physicians were even more scarce with just 1,950 working in the field; a mere seven doctors per 100,000 people.
Conscientious
Even considering these numbers, O'Donnell does not see the OH industry as necessarily understaffed. "A lot of occupational health work is essentially about opening up a dialogue between the employer and the employee. Training employers to be more conscientious in listening to their staff and understanding what their staff need is a better answer than introducing a third party," he says.
Although larger employers may have the means to support their own in-house OH services, most small to medium size enterprises (SMEs) have to rely on outsourcing their employee benefit requirements to a third party. Although SMEs accounted for almost 60% of UK employment in 2003, research by the Institute of Occupational Medicine showed that just 6% of small businesses provided 'comprehensive OH support'. Obviously there is room for growth in this market, but some remain dubious as to the benefits of outsourcing.
Financial incentive
Leeser says: "Outsourcing is good as it provides a more flexible way of working, but in order to offer truly effective treatment an occupational health provider should be familiar with the organisation that it is serving."
O'Donnell bluntly echoes these sentiments: "Outsourced doctors feel more like contractors than consultants. There's very little face-to-face contact; everything is done over the phone or by email".
Although the SME market has the potential to see large-scale growth in OH provision, opportunities for intermediaries are rather limited, as John Dean, director at Gissings, points out. "Small companies require access to occupational health services, not a full-time obligation that they neither need nor can afford."
Another factor that may discourage advisers from getting involved is that there is little in the way of financial incentive. "Larger intermediaries advise on third party occupational health providers but rather than getting commission for their advice they may receive a fee for sourcing the provider," says John Matthews, European partner, health and group practice at Mercer. "There is not a lot of money to be made but then the adviser's primary concern should be what is in the best interests of their client".
Intermediaries can find that OH occupies a strange position on their agenda. Although it seems to complement a product like group income protection (IP), it is not a direct part of an adviser's concern. "Occupational health is not a proactive attachment to group income protection; advisers are not saying buy group income protection and get occupational health for free," says Newman. "If a group income protection scheme has a 26-week deferral period and the policyholder has occupational health support in place, it will be employed to re-habilitate the worker and return them to work before the deferral ends and the claim will have to be paid."
Advising clients on suitable employee benefit providers constitutes a small part of intermediaries' business and many employers approach major OH providers such as Previa and Aon directly.
Some larger insurers have their own in-house rehabilitation services that offer a limited form of OH provision. Norwich Union, for example, has its own specialists while UnumProvident has a 30-strong rehabilitation team including psychologists, physiotherapists and non-medical motivational staff.
Confusing picture
Of course, insurers could simply be looking out for their own interests in promoting rehabilitation and stopping any group IP claims reaching payout stage. This is also in the interest of the employer as the provision of OH support keeps their premiums down.
Essentially the industry is left with a thoroughly confusing picture of the occupational health market. New legislation should spur the market but growth will be restricted by the shortage of medical professionals working in the industry. The SME sector is regarded as the biggest potential growth area despite the minimal support requirements of small enterprises. Presiding over this mass of contradictions are the larger intermediaries and consultancies who are positioning themselves to promote OH, even though the monetary benefits are negligible. Attempts to try and predict what is to come over the next few years are ill-advised.
Although growth looks set to continue, the most important de-velopment for OH is not mounting volumes of legislation but a long-overdue rethink of how OH services are offered to employers, says Newman. "Occupational health should change from a reactive treatment-based service to a pro-active evidence-based, health risk management service".
This preventative approach to OH, curbing illness before it necessitates absence from work, would be welcomed on all fronts. It would be good for employer's premiums, good for employee's health and good for insurers' pockets. At least that's one thing they can all agree on.
COVER notes
• Research by the Health and Safety Executive (HSE) revealed the UK has the lowest level of OH provision in the developed EU.
• Although the SME market has the potential to see large-scale growth in OH provision, opportunities for intermediaries are rather limited.
