The burgeoning occupational health industry has fast become a frontline weapon in the fight against sickness absence, says Stephanie Spicer
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The occupational health market is one of the fastest growing around. However, there are two key problems within occupational health provision: providers getting access to clients and client access to providers.
Given the increasing realisation among employers of their moral and legal responsibility towards employees’ wellbeing, not to mention the potential costs of not doing so, you would think the bridge to link the two would not be impossible. But there is a huge disparity, between services offered by providers in the market and an understanding among employers as to exactly what they need for their businesses and staff, and how to go about finding the right solution.
Dr Mark Simpson, managing director of Axa PPP Occupational Health Services, says: "It is much more difficult to find a need specification than for a lot of other procurement exercises. People can put as much commoditisation on it as possible and just say how much will it cost, what is the cost of referring one person for a medical assessment? At the more regional end of the market that could work relatively well, but for an organisation to create more understanding of why they should buy occupational health and what form that should take is still a challenge for them."
There are about 200 commercial occupational health providers in the market, dominated by Capita Health Solutions, Bupa, Axa PPP, Atos Origin and Grosvenor Health. Of UK plc only about 20% have some form of occupational health provision, so the scope for occupational health providers is obvious, and for commercial providers in particular. Phillip Blackburn, senior economist at Laing & Buisson, says: "We believe spending on outsourced services is growing faster than on in-house services. This is more to do with structural change in the employment sector, and the decline of large manufacturing industries and former nationalised industries and growth of medium-sized service sector companies."
The case for occupational health services is apparent. The Chartered Institute of Personnel and Development (CIPD) Absence Management Survey published in July this year concluded that: "the involvement of occupational health professionals is rated as the most effective method of managing long-term absence, but it is only the fourth most commonly used approach". The Value of Health and Safety 2005 report from the Institution of Occupational Safety and Health (IOSH) shows that most health and safety professionals spend less than a quarter of their time on tackling occupational health issues.
These professionals believe more should be invested in tackling work-related stress (65%), musculoskeletal disorders including repetitive strain injury (59%), noise (29%) and rehabilitation (25%). Occupational asthma and dermatitis, alcohol and drug misuse, and vibration were also mentioned with only 7% of respondents believing that none of these areas needed extra investment. Lawrence Waterman, IOSH president, says: "These results show that occupational health is not being taken seriously enough by British businesses. Employees are being put at risk by employers who do not invest sufficiently in tackling these important health issues. It is in the interests of employers to take action to ensure both a healthy and a productive workforce."
If the stumbling block to OH provision is access, one solution to both the challenge to providers sourcing clients and to companies needing occupational health service could lie in the Commercial Occupational Health Providers Association (Cohpa). Copha is pushing to enhance industry best practice by raising standards in OH. One of the big issues for providers is employers only looking for a good price deal. Pure OH providers will argue price should not be the defining factor in selecting providers. Very often contracts are just about the lowest bid. According to Dr Geoff Helliwell, chairman of WellWork and board director at Cohpa, there are public sector tenders no providers apply for. "We are starting to choose who we do business with," he says. What is driving the market is that the public sector has generally a higher challenge with absence than the private sector. Simon Chipperfield, vice president of medical services at Atos Origin, says: "It is well documented that high levels of absence are quite common in some parts of the public sector.
The government targets the public sector encouraging them to be more proactive and innovative in how they approach the whole absence issue and therefore how they work with OH providers." Private sector trends are starting to influence the public sector with a far greater focus on rehabilitation of people away from work on a regular basis, for example. "The private sector is more ready to accept the business case that if you invest in some early treatment, for example, cognitive behavioural therapy, physiotherapy, and so on, then you will have someone back at work and in a more sustainable long-term employment position than otherwise," explains Chipperfield.
The government may be pushing public sector companies and itself becoming more aware of how occupational health can help its cause. But there needs to be more proactivity on the government’s part according to OH providers. "Occupational health provision is useful to the government because it helps to manage the disability benefits problem and the lack of people in work to pay for pensions in future years. They realise occupational health is what gets people back to work, but they haven’t grasped how short a resource it is and that strategically they need to enable that resource," says Helliwell. A case in point and another new concern for employers and therefore OH practitioners is vibration arm. "There are some increases in legislation which require health surveillance. And one of the craziest, new regulations proposed is about vibration damage of hands – if you look at the Health and Safety Executive (HSE) impact assessment of that it estimates an increase is needed of the 300,000 people having health surveillance now to 1.4 m people per year. Where are we going to do the health surveillance for another 1.1m employees? HSE reckons it will need another 800 OH nurses. There are only about 4,000 anywhere and there is no method of producing 800 more in a year," says Helliwell.
One way of meeting the problem of lack of professionals trained in OH and another trend in the market is the shift towards using technology and e-business solutions, for example self-audit questionnaires that employees fill in at their own workstation. If something pops up that doesn’t seem quite right an OH practitioner will contact them to address the issue. Mandip Thandi, business development manager at Corporate Health, says: "Web-based solutions cut out the people costs – the most expensive part of OH is people, because it is based on professionals providing a hands-on service, either doing medicals or taking on-board information and repacking it in a format business can use to make better informed decisions." Offering a holistic approach to an employer is also gathering pace among many OH providers.
John Wrigglesworth, business development director at Capita Health Solutions, says: "Our whole consolidation approach has been around building health management systems. We took the view to create a clinical platform on which to build innovation and not have to sub-contract. There is a focus in OH industry of building web-enabled systems, taking OH into the general health arenas, with mitigating employee risk being the key focus." He adds that prevention support as well as rehabilitation and appropriate assessment for ill health retirees is vital. "In each of those areas you are tackling employing the wrong people for the job, not supporting your employees enough while they are working so impacting on absence, stress and so on, and if you are not doing proper assessment of ill health retirees or pension liabilities you are not managing your pension fund effectively," says Wrigglesworth.
Holistic and proactive approaches to occupational health, whether from a large or small provider, are still helped by what Chipperfield sees as a trend for employers going outside their organisation to a third party and asking them to manage the absence issues for them from day one. "Traditionally, most companies have not gone to OH providers until a certain point in their attendance management policy, say after seven days of absence or after a certain degree of reoccurrence or if they are hit with a specific type of health issue."
While providers are committed to setting good standards of practice and employers to meeting health and safety standards the government wants them to adhere to, there is an enormous amount of preparatory and educative work to be done. But a pattern is well set. "The market is still growing and generally the realisation that there is more that can be done to support the health and wellbeing of employees at work, to keep them at work and reduce the length and frequency of absence," says Chipperfield.
The Facts: What are occupational health providers?
The International Labour Organisation’s (ILO) definition of occupational health is "the branch of medicine which looks at the effects of health on work and work on health and promoting health in the work place". Providers of occupational health can be individual doctors or nurses providing a service either in-house or to various local organisations or companies employing occupational health practitioners on a wider regional or national basis.
What are the origins of occupational health providers?
The origins of providers are varied. There are providers that have grown out of in-house provision for large companies, for example, Atos Origin used to be the Post Office occupational health division. There are firms that started with one health practitioner doing his or her own thing and then growing, for example, Wellwork. There are also organisations owned by companies interested in the occupational health market, which have formed such as Capita Health Solutions, which bought BMI Health Services recently.
Where to get information and advice on providers?
Commercial Occupational Health Providers Association www.copha.co.uk on 01933 227788.
Nitty Gritty: What are the costs involved?
Costs depend on the size of the employer, what market it is in and therefore the risks staff may encounter at work as well as the scale of the occupational health provision. A heavy manufacturing business or one using chemicals or doing drug and alcohol tests could pay £100 to £400 per employee per annum. In lighter manufacturing or public sector environments, costs are more likely to be around £50-75 per head. A service industry employer, for example, a large retailer, sickness absence-only requirements could cost about £25 per head.
What are the legal implications?
The legal implications of not having OH provision are the same for an employer as if they had OH provision. In fact if it comes to an employment law situation damages might become punitive because the employer had the right advice and didn’t take it. The Health and Safety Executive issued stress standards last year, which it expects business to comply with but these are not legislative. Legally, employers are obliged to make some form of OH provision under the Management of Health and Safety at Work and Duty of Care laws.
What are the tax issues?
If an employee is injured at work they will pay not tax on occupational health benefits paid to them for their treatment and rehab. If an employee is injured out of work but the employer pays for treatment to get them back to work, it is seen as a taxable benefit-in-kind.
In practice: What is the annual spend on occupational health provision?
It is estimated, by Laing & Buisson, that £325 million was spent on occupational health services in 2004, of which £125m is believed to be contracted out to commercial providers and the bulk of remaining £200m spent in-house by large employers.
Which occupational health providers have the biggest market share?
The largest provider now is Capita Health Solutions with 22% of the market, followed by other large providers including Atos Origin, Grosvenor Health, Axa PPP and Bupa.
Which occupational health provider increased its market share the most over the past year?
By virtue of having acquired BMI Health Services, Capita Health can be said to have increased its market share in one hit over the past year.