20 June 2016
As a business, you work hard to maintain good relationships with your clients – and the payoff is of course obvious. Forward-thinking companies will as well put great effort into nurturing relationships with their employees, as happy, satisfied workers are indeed an organisation’s greatest asset.
But what about the relationship with healthcare providers? It is, in fact, a business association not given the thought it deserves, yet the benefits of building closer ties are significant.
Today, the total insured market in the UAE is about 5 million people, with a large amount covered through group insurance (accounting for 41% of total policies issued in 2014). Written premiums throughout the UAE total around $9bn a year, and, according to data from the UAE’s Insurance Authority, the average annual growth rate of health insurance premiums in the country has hovered around 20% up to 2014, with the annual cost of insuring an employee in Dubai now ranging anywhere from Dh650 all the way up to Dh15,000.
So what’s the connection between the cost of healthcare and the need to have direct relationships with providers? Quite simply, such a framework can play a considerable role in containing costs, with case studies out of the UAE showing a reduction of as much as 20% in major areas of health spend among corporations who have shifted to such a model.
The gatekeeper mindset
A big concern within the UAE healthcare system (and healthcare systems in many countries around the world, for that matter) is a general lack of “healthcare gatekeepers”, and because of this, individuals exhibiting symptoms of even the most basic of conditions, such as a cough, for example, can visit a specialist and be administered tests rather easily. Indeed, in many cases it is far easier to receive potentially unnecessary consults and tests than to not receive them, and all of this is in large part due to the absence of proper mechanisms of control.
And so we should understand that one of the elements driving the success of the model of establishing closer provider ties is the ability to have a much higher level of control in this regard. Because outpatient consultations and diagnostics make up the majority of healthcare costs, a tighter provider network will allow a corporation far greater control, effectively reducing a large amount of those unnecessary costs.
There is of course more to it, and we’ll now take a closer look by focusing on six ways in which companies in the UAE are benefiting from a shift in their provider relationship approach.
1. Preventing misuse of services
As alluded to above, where there is no framework in place, an employee with something as minor as a mild sore throat can visit the local hospital, see an ear, nose and throat specialist, have various costly tests and treatments, and so on. While the individual is simply working within the system available to them, so too is the hospital or specialist. And knowing that the insurance company will pick up the tab, maximising revenue through whatever means necessary becomes a natural part of the provider’s way of running the business.
With closer provider ties, however, frameworks for addressing various minor health concerns in particular are much easier to establish and to communicate among your employees. And of course the providers in your network will want to play their part in reducing excessive consults and testing in their effort to keep the insurance premiums for you, their customer, more manageable.
2. Managing absenteeism
With closer provider ties, frameworks for managing absenteeism are also far easier to implement and monitor. In labour-centric work facilities in particular, an onsite doctor arranged through your provider network, or even as a first step a medical helpline, can help ascertain just how fit for work someone really is so that abuses are kept in check. And for the white-collar workforce the same level of control can be seen through those tighter relationships with the network physicians who again are part of the framework you have set up to better monitor and control absenteeism abuse.
Through a recent construction client of ours, for example, we have seen tremendous results with such a programme. Specifically, whereas prior to the implementation virtually all employees requesting a sick day were granted one by the physicians in the “uncontrolled” network, post-programme implementation saw the number reduced by more than half.
3. Reducing the cost of pharmaceuticals
As part of an ongoing relationship with a healthcare provider or tighter network of providers, you can stipulate that only generic pharmaceuticals are used for treatment wherever possible. In the UAE, generic medications – which, to be clear, are just as effective as their branded counterparts – can cost 80-85% less than the branded alternative, yet currently only account for 10% of the market share. A passive approach to your relationship with your healthcare provider in this respect means you are missing out on what is actually a very easy way to significantly reduce costs, because pharmaceuticals are one of the greatest contributors to your rising premiums.
4.Tackling healthcare fraud
An underlying theme throughout this article is in fact the issue of fraud and abuse. As mentioned at the outset, written premiums in the UAE total around $9 billion annually. What was not mentioned was that of this amount, medical fraud and abuse is estimated to account for about $1 billion.
Fraud and abuse can cover a broad range, including the over-prescription of medicines, unnecessary tests, encouraged repeat physician and specialist visits, inpatient care that is not needed, and much more.
A solid, trustworthy relationship with your healthcare provider benefits both parties: whereas the providers will be far more careful about not exploiting patients, they’ll also be mindful in helping you to discourage employees who may be (intentionally or otherwise) abusing the system.
5. Providing valuable data
Claims data paints a vivid picture of a workforce’s health, allowing employers to identify healthcare trends and therefore invest efficiently and effectively in resources that will benefit their employees. According to the Dubai Health Authority (DHA), in 2012 only 6% of total medical expenditure was on preventive care. Companies need to step up here, and proper claims analysis is the first step.
Working with your healthcare providers more closely to review the data, this information can be used to implement highly focused wellness initiatives that address your company’s biggest health concerns, all with the very clear goal of initiating programs aimed at reversing the trend of your rising insurance premiums.
I will add here that this information should also be shared quite directly with the employees to get the required level of involvement from them. Your staff should understand their role in this and become familiar with the concept of “personalised medicine”, whereby they are both encouraged and even incentivised to take a leading role in managing their own health and indeed their own insurance fund.
If we think about it, health is actually not the responsibility of the doctor, but of the individual. Your employees need to stay on top of their preventive screening and health management, which should include not just the obvious tests such as prostate, mammography, cervical cancer screens, etc.; but also the less common tests such as coronary artery screens for calcium build-up (a very good indicator of heart disease), body fat percentage and other body composition readings, lung capacity, and so on.
All of these empower the individual to be involved in the process of making informed health management decisions – again, for which they can and should be incentivised. It’s a concept pioneered in large part by Discovery Healthcare in South Africa with their Vitality program.
6. Proper chronic disease management
Very much leading off of point five above, closer provider ties result in far better management of your chronically ill staff. While estimates vary, we can generally conclude that 80% of healthcare costs come from 20% of your staff (those with the poorest health). Working with your trusted healthcare partners to develop more effective ways of treating certain chronic illnesses – such as diabetes, hypertension, respiratory conditions, and others – will lead to better management of the conditions, therefore reducing the instances of flare-ups and in turn overall costs.
Perhaps as a seventh benefit we could add the point that in the UAE, where 50% of employees view benefits as a vital component of workplace satisfaction, a close relationship with your healthcare providers will enable you to address this issue as well by offering greater health benefits. That is, tighter provider relationships are not about controlling costs by reducing or limiting services, but rather about controlling costs by eliminating the unnecessary – and in the process this actually provides a better overall quality of healthcare to your entire staff.
And that’s because those tighter relationships will, over time, allow you to work with your providers to address key issues that contribute to a better overall health offering. This includes everything from reducing waiting times, to quicker access to specialists where needed, to the co-implementation of more advanced preventive health programmes, to the establishing of helplines, and so on. Another way to look at it is that your providers, appreciating the business you are bringing them, will want to work with you to offer the best level of care possible.
At the end of the day it is all very logical: A mutually-trusting relationship with your healthcare providers where all of your medical requirements are under one roof means you have closer links to the system – a system that you will be helping to shape – and as a result will have much tighter control on the purse strings. Indeed, consolidating your healthcare requirements with one or several providers could help save you in the region of 15-20%, and in the face of globally rising premiums, that’s a serious sum.
Written By Mark Adam – Founder and CEO at Anglo Arabian Healthcare