A sea of change is occurring in occupational health as its emphasis shifts towards wellness and the prevention of ailments, says Sam Barrett
Occupational healthcare is undergoing an image change. While it used to be focused around looking after sick employees, its emphasis now is on helping companies to keep their workforce healthy and productive.
According to the World Health Organisation, the purpose of an occupational health service is to “promote and maintain the physical, mental and social wellbeing of all staff”. The term occupational health encompasses reducing risks in the workplace, the management of sickness absence and rehabilitation of employees who have been off work. Dr Richard Preece, business development director at the occupational health provider Atos Origin, says: “For 30 years or so, occupational healthcare was a relatively unexciting market. But, in the last couple of years, there’s been plenty of innovation as the focus [among organisations using occupational healthcare] shifts towards improving performance.”
This innovation has lead to a number of product developments, especially in absence management. Alex Jones, commercial director of Norwich Union Occupational Health, explains: “As the cost of absence is so much more visible it makes it a lot easier for organisations to justify spend on occupational health services.”
Day-one reporting systems are becoming an increasingly popular occupational health tool for managing sickness absence. These require employees who are unwell to call a telephone number manned by occupational health professionals and provide details of what is wrong with them and how long they expect to be off. This enables the employer to manage absence more effectively, for instance, by arranging cover where necessary. The service can also help employers to identify any sickness patterns or recurring health problems with staff. Dr Mark Simpson, managing director of Axa PPP healthcare Occupational Health, says: “These services ensure that a consistent approach [is taken] to recording absence. [Because] each caller is treated in exactly the same way, it is easier to assess the reason for their call and follow it up where necessary.”
Not everyone is convinced though. John Wigglesworth, business development director at Capita Health Solutions, says: “As a stand-alone product the benefits of day-one absence recording are unproven, but when it is integrated with other occupational health services, it can deliver significant benefits.”
Delivering these integrated solutions is very much in vogue, with providers putting occupational health services together with other products, such as medical insurance, to help employees get fast access to medical attention and to return to work as quickly as possible. Areas concentrated on by occupational health providers also tend to be those where there are shortfalls in the National Health Service (NHS). Doug Rice, head of sales at Bupa Wellness, adds: “Many of the latest product developments are in areas where the NHS doesn’t always deliver a good service. This includes GP access, stress management and sickness absence tools that provide [for] early intervention.”
Providers are also looking at ways to give smaller firms access to occupational healthcare. Traditionally, the costs involved with employing occupational health practitioners has meant that only large organisations or those with a specific requirement, for instance chemical manufacturers, have had occupational health coverage.
Often it is the regional providers that target smaller firms, but larger players are also increasingly eyeing this market. Both Bupa Wellness and Axa PPP, for example, offer packaged products for smaller organisations.
Large organisations that have traditionally run their own in-house occupational healthcare departments are also starting to outsource the service. According to Market and Business Development’s UK Occupational health market development 2006 report, the value of the outsourced occupational health sector is projected to reach ¬£183 million, representing 50% of the total market.
Another reason larger companies are beginning to outsource more is that they are realising that being able to refer cases to an independent and impartial expert could help if an employee tries to take legal action against the company. Using an occupational healthcare provider can also help organisations to ensure that their employment practices are kept up to date.
This growth in demand for outsourced services has spurred a flurry of acquisition activity, with some players increasing their size to gain the advantage of critical mass, such as with Capita’s acquisition of BMI Health Services in July 2005. Medical insurers, in particular, appear keen to include occupational healthcare in their portfolios. The two largest players, Bupa and Axa PPP Healthcare, have offered occupational health services for several years and these were joined by offerings from insurer Norwich Union and healthcare provider HSA last year.
As a result of this activity, the industry is facing some growing pains. In particular, there is a shortage of trained occupational healthcare practitioners. The NHS and the armed forces have been the traditional training grounds for specialists, but cutbacks have significantly reduced supply. Partly in response to this, occupational healthcare providers have been looking at how they can use technology in their products. Some services, for example, are starting to move online, such as pre-employment health screening questionnaires.
Providers are also experimenting with the use of web cams and video-conferencing. Occupational health provider Grosvenor Health, for instance, is piloting video conferencing with a food company where the food handlers need to have their hands regularly checked for skin diseases such as dermatitis.
With more emphasis by the employer on the financial benefits of occupational health, some of the providers are also examining the way they charge for their services. “We’re looking at sharing risk with the employer and have been considering remuneration models where we’re only paid for the results we deliver,” says Dr Preece from Atos Origin.
?What is occupational healthcare?
Occupational healthcare concerns the promotion and maintenance of the physical, mental and social wellbeing of employees. It aims to protect staff from workplace risks, but also to manage the effect of any health issues on their work.
What are the origins of occupational healthcare?
The link between work and health has been examined for hundreds of years but it wasn¬’t until the introduction of The Factory Act 1833 and The Mines Act 1842 that employers really started to take notice of the need to safeguard the health of their employees.
Where can employers get more information and advice on occupational healthcare?
The Commercial Occupational Health Providers Association (COHPA) is a trade body promoting the benefits of occupational health. Visit www.cohpa.co.uk or call 01933 227 788 for more information. The Faculty of Occupational Medicine is a professional body for occupational health practitioners that promotes best practice in this area. Visit www.facoccmed.ac.uk or call 020 7317 5890 for more information.
?What are the costs involved?
Cost depends on an organisation¬’s size and the type of service required. A pre-employment questionnaire will cost between ¬£15 and ¬£25, employee health screening between ¬£70 and ¬£100 per employee, referral to an occupational health practitioner between ¬£200 and ¬£400 and a day-one absence reporting system between ¬£30 to ¬£50 per employee each year.
What are the legal implications?
Safeguarding employee health and wellbeing falls under the Health and Safety at Work Act 1974 and The Management of Health and Safety Work Regulations 1999. Additionally, some occupations are covered by specific legislation, such as the Control of Noise at Work Regulations 2005 and the Control of Substances Hazardous to Health Regulations 2002.
What are the tax issues?
Services are subject to VAT, but most organisations will be able to claim this back. In some cases, for instance, where treatment is paid for by the company to aid the return of an employee to work it will be liable to benefit-in-kind taxation.
?What is the annual spend on occupational healthcare?
In 2006, the occupational healthcare market is projected to increase by 7% to ¬£363million, according to Market and Business Development¬’s UK Occupational health market development 2006 report. Of this, the value spent on the outsourced sector is projected to reach ¬£183 million, accounting for about 50% of the total market.
Which occupational healthcare providers have the biggest market share?
Two providers, Capita Health Solutions and Atos Origin, are regarded as the largest providers of occupational healthcare. Other large players include Axa PPP Healthcare, Bupa Wellness and Grosvenor Health.
Which occupational healthcare providers increased their share over the year?
Capita¬’s acquisition of BMI Health Services in July 2005 significantly boosted its market share, turning it into one of the leading providers. Further consolidation occurred with RPS Group¬’s acquisition of Business Healthcare. Two insurers, Norwich Union and HSA, also entered the market in 2005, with their respective acquisitions of Private Healthcare and Adastral Health.