6 strategies for getting better value for money from healthcare cover
Inflation in the UK remains stubbornly high, and this trend extends to healthcare, with an average annual increase in scheme rates of about 9.8% over the past two years.
It’s important to note that rates during 2020 and 2021 were influenced by abnormal market conditions caused by the Covid-19 pandemic. When considering rates from 2019 to the present, we are seeing compound inflation over three years of around 6%.
Despite these inflationary pressures, private healthcare schemes are proving resilient.
Having analysed data from across the market, companies are continuing to invest in increased healthcare benefits for employees. This data showed that there were no consistent patterns of reducing coverage, limited eligibility, or significantly increasing excesses.
These trends can be attributed to the growing demand for healthcare, driven by pressures on the NHS, the ageing population and corporate strategies prioritising employee wellbeing as a tool to attract and retain talent.
As we move towards 2024, UK employers are seeing the importance of private healthcare benefits and continue to increase the scope of the cover and percentage of the workforce eligible for such benefits. Improving employee health and wellbeing seems to be more of a priority than controlling costs.
Improving value for money will be the key focus in 2024.
As employers are not expected to reduce benefits or eligibility rules of healthcare schemes, the key focus them will be on strategies to improve value for money and return on investment achieved through their benefit plans.
6 strategies for achieving this:
1. Member support
Employers are increasingly seeing the value of providing a high-quality service to their employees. This includes fast call-answer times and an empathetic and supportive approach to helping employees access the care they need.
Accessing treatment quickly not only benefits members, but also employers due to reduced sickness absence costs.
2. Healthcare trusts
With healthcare premiums on the rise, employers are increasingly choosing healthcare trusts. Most large organisations already provide healthcare benefits through a healthcare trust model, as this is more tax-efficient and allows the company greater control over benefits and rules.
3. Administration fees
Administration fees, not linked to medical inflation, are crucial in understanding services provided within private healthcare costs.
Employers should look for administration fees that reflect the services required to manage their healthcare trust, particularly those not linked to medical inflation.
4. Payment terms
In 2024, companies paying substantial premiums in advance should be looking to reevaluate this strategy or negotiate lower administration fees.
5. Bespoke benefit design
Increasingly, employers are leaning towards building unique, customised healthcare schemes that reflect their culture, budget and specific requirements, including new benefits like cover for infertility, neurodiversity and chronic conditions.
Using a healthcare trust gives employers the opportunity to design benefit schedules to meet their needs and include new and innovative benefits.
6. Nurse case management
Managing costs on a case-by-case basis through qualified nurse-led claims management is essential, especially with advances in high-cost treatments. This ensures value for money and supports members throughout their claiming journey.
At Healix, our highly experienced nursing team not only manage the cost of claims, but also support members through their claim, including transitioning into the NHS, if required.
The private healthcare sector is navigating inflationary challenges, but employers are adapting by prioritising employee wellbeing and exploring innovative strategies to enhance the value of their healthcare benefits.
In partnership with Healix Health
Healix Health provides flexible, bespoke healthcare solutions an alternative to traditional private medical cover.
