On the road to recovery

Rehabilitation has become the buzzword of the insurance and protection industry in recent years, but it is not just lip service that some providers are paying to this new approach.

Many providers see the true value that rehabilitation can bring to their customers and understand that it could help to change the face of insurance for customers. Instead of a pure transfer of financial risk, insurance can add value and give assistance to those who need and desire it.

With rising costs of sickness absence, approximately 3,000 workers moving to incapacity benefit each week and 90% of those never returning to work, this is a problem that is not going to go away. A concerted effort is required to get employees back to work and return to an active life. After all, people are the most important asset any business has.

The impact of long-term sickness absence inevitably reduces productivity and adversely affects business continuity, and, in some cases, performance. High absence rates can be costly to companies, so it makes good business sense to have a support process in place.

Managing sickness

Demand for practical solutions that get people back to work while reducing the cost of absence has grown dramatically. In the last 20 years the cost of sickness benefits to the Government has increased four-fold and a recent Confederation of British Insurers survey revealed current sickness absence costs to business amount to £11bn.

There is an urgent need for a system whereby sickness absence can be managed in the short-term and prevented from becoming a long-term problem. The great irony about long-term sick leave is that the three major causes ' repetitive strain injury, back pain and stress ' are the illnesses most likely to respond positively to well-planned rehabilitation programmes.

Early intervention, and individual care management programmes will have a significant impact upon the time scales of absences, preventing many from becoming long term. Long-term absences are more complicated to resolve and the underlying issues more difficult to detect.

Some employers recognise this and are seeking expert advice and specialist skills in managing both short and long-term sickness absence. Employers believe most absence is caused by genuine sickness. Although short-term absence accounts for 80% of cases, long-term absence has a greater overall impact upon business and results in over 40% of the total working time lost each year. With this clear threat of long-term absence, there is a real advantage of having an insured arrangement to cover the cost of absence.

The State system is not best placed to enable long-term sick or disabled employees to get back to work. This is largely due to the structure and disparate systems of the NHS and Benefits Agency. The NHS treats individuals and the Benefits Agency financially supports them, but the two are quite disconnected. There is no link to ensure the welfare of the individual is the central focus.

The benefits system does not provide the flexibility needed to help people back to work. For example, if you wanted to return to work on a part-time basis to ease yourself back into the working pattern, all of the benefits received from the State are lost. The individual may end up in a worse financial position than when receiving benefits. By rewarding absence and not encouraging a return to work through flexible payments, the benefits system is failing to get people back to work and an active life.

The shortfalls

The British experience is far behind our European counterparts. In France, Germany, Holland and Sweden the prospect of getting someone back to work is much greater because the State systems are not only in place, but employers are often obliged to put rehabilitation plans onto their agenda.

British rehabilitation schemes fail because it is not possible to claim sickness benefit and work at the same time. But long-term sick pay schemes supported by insurance plans in this country have no such restriction. Many employers recoup a proportionate benefit during the rehabilitation period, ensuring a financial incentive to both employer and employee to take up the rehabilitative option.

Due to the disparity in the State system and other problems such as growing waiting lists, different trigger points in an individual's case may be missed. Without recognising those signs, the underlying problems cannot be resolved. It is really only the private sector that can take a holistic approach to an individual's wellbeing. The NHS cannot intervene early enough to prevent such injuries or illnesses from becoming long-term problems. The private networks of specialists can fulfil the demand from insurers and provide for the shortfall in the NHS system. The NHS remains important and should be utilised where appropriate to the individual's needs, but in cases where it cannot accommodate these needs, alternatives need to be sought.

The NHS is failing today and it will become worse as the demographic problem increases and tax revenues diminish. As people get older, they are more vulnerable and at risk from different illnesses and injuries, and their problems become more complex and life threatening.

Marrying public and private

These increased demands upon the NHS will inevitably lead to the Government trying to draw funds from the corporate purse. Various methods have been suggested, such as increased Insurance Premium Tax, National Insurance and general taxation. Insurers also face large bills from the NHS for the care given to their policyholders or personal injury liability cases. Currently the limit is capped, but the NHS trusts will soon be able to charge the full cost of treating people. Considering this, the private and public providers must work together to ensure better systems and outcomes for individuals.

The growth in demand for effective rehabilitation presents an opportunity for the private sector to demonstrate added value to the clients and individuals that purchase and use insurance. The private sector is able to take a holistic approach ' unlike the State system. It can operate with the individual at the centre of the process rather than existing protocols determining the individual's recovery as is experienced through the State system.

When an individual has been off work for some time, their self-esteem can deteriorate. The fear of returning to work becomes worse the longer their problem is ignored.

People need help in returning to work, and frequently a gradual approach is required. With the right specialist support and financial flexibility to enable a return on a gradual basis these fears can be overcome. After all no-one wants to be ill or injured, but sometimes the prospect of the alternatives are too much for that individual to cope with alone ' they need support.

Flexibility is crucial to successful rehabilitation. Indeed the Government recognises the increased role that insurers can play and will look for the private industry to fund rehabilitation more and more in the future. Private sector relationships will become ever more important and those organisations with good existing relationships and networks will be more able to compliment the public provision and compete in the private market. Meanwhile, the industry will also need to agree protocols with the NHS when it comes to funding treatment received through the State system.

The insurance industry can also provide practical help to businesses. It has the opportunity to give something back and add value for its clients. For larger organisations their in-house expertise will ensure compliance, but the majority of commercial and industrial enterprises will be reliant upon external resources.

The insurance industry can help to educate employers in managing absence more effectively. When absences occur the employer's first steps should be to maintain communication with the absent employee, to explain how the process works and the principles behind it, and seek an early opinion from their insurer.

Providers can highlight problems that may otherwise be overlooked. Certain trigger points in absence records may signal underlying problems and solutions can be sought. Employers also need to take steps to separate short-term absences from long-term absences. For example, if the absence is due to poor performance, pressure at work or problems between individuals, the employer should seek to deal with the real issue, rather than view it as a sickness problem. Managers need to be trained in recognising and understanding employees' needs and reasons for absence.

Going the extra mile

Absence management can and should go further. It should provide the flexible approach to management that enables an individual to alter their hours to accommodate childcare problems, for example. There may be some very simple solutions to many short-term absences and by providing solutions in the early stages they can be prevented from becoming long-term problems. Educating managers and adapting processes to ensure the best control of sickness absence means businesses can enhance productivity and reduce the costs incurred due to absence.

Through developing flexible and people-focused systems a greater understanding of the reasons behind absence can be achieved and, in turn, more effective management of the problems. This is not to say employers should depend upon their providers, but more that providers should add value and enable better management and understanding of sickness absence.

Working together, employer, employee and insurer can be certain that the best interests of each are served. Rehabilitation is very often the best solution for all concerned and is more readily achieved when all parties work as one, with a focus on that objective.

Robert Fielding is head of operations, healthcare and assistance at Royal & SunAlliance