Mike Benton, chief executive of Medicals Direct, shares his future of care provision with Paul Robertson.
“I’d give you the names, but I’m not sure which ones are public knowledge or not. But one has said that since using Medicals Direct services, they’ve had a 20% improvement in their throughput. Friendly societies have been a very closed market and just haven’t been moving forward".
“I think there has been a huge turnaround in what friendly societies want to do. I’ve been bleating for years, I’ve said to societies ‘You’ve got this wonderfully loyal client base, you’ve got loads of cash – go and market the product and outsource the admin to everybody else’.
“They’ve had antiquated admin systems, antiquated underwriting, antiquated methods of getting medical evidence, etc. Now it’s really starting to move and they are outsourcing – they are getting efficiencies and they are finding it easier to bring clients to market”.
A Friendly Society Hub?
Benton’s plan, which he revealed several years ago, is for a friendly society hub, where societies outsource all their underwriting and claims, while sharing the cost among themselves.
“They haven’t got there yet,” he said. “But we’re moving that way. And we’ve had a huge success with the friendly societies – huge – over the past six months.”
Essentially, Benton’s problem in the insurance sector as a whole is growth. With a large share of the market, the target is to maintain share and grow where it can. Benton sees those areas as in claims, in friendly societies and more tele-interviewing.
For the group as a whole, the growth Medicals Direct sees coming is through healthcare and in particular rehabilitation. As the market leader in the insurance industry in terms of medical evidence gathering and underwriting, claims and rehab, the company has difficulty growing. What it has done is split into two businesses.
The insurance services arm comprises of risk -assessment, medical assessment and outsourcing. At the core of the healthcare division is a couple of acquisitions; Company Health, an occupational health platform, and Milligan and Hill, which is physiotherapy.
Benton explains: “We took our existing quasi-healthcare businesses, such as Doctors Direct and the clinics and a bit of rehab, and put it all into one healthcare business".
“We now have a healthcare business with revenues of about £7m. This is separate from the insurance business. We have medical networks, which provide medical services to the insurance industry, and then we have the same providing services to the healthcare industry. The sales and marketing is separate, using a national footprint of medical professionals.”
This new division has led Medicals Direct to apply for permissions as a service provider to the NHS. Benton is perhaps not alone in expecting the NHS reforms to open doors to the private sector.
“The NHS will survive, but as a different animal. It should provide emergency care, which it does brilliantly. It should also provide more care for the elderly. What it could outsource is elective surgery, physiotherapy, counselling – things like that,” he said.
This is a full circle for Benton, as 15 years ago Medicals Direct started in long-term care markets as a long-term care medical assessment provider. Benton expects to return to this market soon.
He said: “I think with the ageing population and the increasing incidence of dementia, long-term care has to be a growth market. One of the areas that we were looking at is early dementia assessment – almost pre-long-term care.
“Because the problem at the moment is people have dementia, which progressively gets worse and worse and worse, they then go to the doctor, who in turns simply says ‘I think you should go to a memory clinic and get assessed".
Clinics in the NHS are few and far between, while waiting lists are forever. By the time that person is assessed, they are already five years into a progressive disease. “So they end up going into an old people’s home earlier, or failing to be able to carry out their activities of daily living, necessitating a carer, necessitating all of these costs".
“Had you examined that person five years before and did an early pre-dementia assessment, you could have treated it with drugs and relevant care. You can keep people out of homes for longer. You can keep them well and fitter for longer. Long-term care products of one type or another have got to become, if not compulsory, essential”.
With most of the action away from the insurance sector, will the insurance business remain core for Medicals Direct? It is clear from his reaction that this is a question bothering Benton.
He said: “If you’d have asked me that any time in the last 14 years, I would have said we’re in the insurance sector, absolutely core – that’s it. If you ask me now, I say we have to try and build other markets".
“We will always maintain our hearts in the insurance market, but we need as a business to grow. What we now want to do is sell those services of our medical professionals into the corporate market, into the healthcare market, into the NHS, so we have lots of markets.”
It’d be wise to suspect that in the next 15 years Medicals Direct will be coming out from behind the scenes.