Experts fail to agree on hybrid cash plan’s appeal

Extending cash plans to become ever more like private medical insurance has always been tempting, but experts fail to agree on hybrids’ appeal, says Amanda Wilkinson

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Healthcare cash plans are being made more relevant for employers by incorporating services such as an employee assistance programmes and diagnostic testing.

It still remains to be seen whether this new breed of hybrid cash plan will be developed further to provide limited cover for surgical procedures.

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Employers have yet to fully embrace the idea of paying for cash plans for their staff, although increasing numbers are doing so.

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Health screening and employment assistance programmes (EAPs) are among the services being added to help employers justify paying for cash plans as a benefit. However, this new breed of hybrid cash plan may be developed further to include surgery.

Historically, traditional healthcare cash plans offering personal services such as dental and optical cover, have been sold to individuals in the workplace as a voluntary benefit, while private medical insurance (PMI) has tended to be funded by employers for groups such as senior management.

However, some healthcare providers are already offering some PMI-style products. Four years ago, Medicash launched the Essential Surgery Plan, which can be bolted onto a cash plan and enables members to draw up to £6,000 towards the cost of operations.

PatientChoice has just launched the Priority plan, which is aimed at employers and offers access to private care worth up to £10,000 for 60 medical procedures including hip, knee and hernia treatments at a cost of between £50 and £65, per employee per year. The product could be bolted on to a cash plan, says Vicki Leslie, head of marketing at PatientChoice. “The idea is to cut back on the very expensive premiums people are having to pay for standard PMI,” she adds.

However, not everyone is convinced combining a PMI-type product with a cash plan will appeal to employers. Philip Blackburn, an economist with Laing & Buisson, says: “They have tried in the past to market cash plans with PMI through brokers, but customers don’t want both.”

Bill Gaywood, chief executive of Medicash, admits it was hard work to gain employers’ interest in the company’s surgery product. Research conducted by Medicash 18 months ago showed that employers were more interested in solutions that help staff to stay well rather than get well. So, earlier this year, it launched the hybrid cash plan product, Reward, which includes gym membership, health screening and face-to-face counselling.

“There’s a great danger that you think what people want is a PMI product with healthcare cash plan benefits in it. What was being said by customers was that this is may be [the case] in the future, but not yet,” Gaywood explains.

HSA has no plans to offer cover for surgery through a cash plan, but is developing its WorkWell hybrid scheme that includes an EAP and face-to-face counselling by adding levels of cover for services such as occupational health.

Suzanne Clarkson, head of corporate marketing at HSA, says: “Previously, companies would have found it difficult to have built a business case for a traditional cash plan so we are developing a range of products to extend this hybrid content to help them meet increasing duty of care [around staff health].”

Another large player in the market, Westfield Health, is also enhancing its hybrid Foresight scheme with an option for a 24/7 GP helpline, gym concessions and cover for children.

However, not all employers have yet committed to funding this new breed of hybrid cash plan for employees. Although the employer-funded market is growing it is still relatively small, accounting for around 10% of the £440m spent on cash plans last year, according to analysts Laing & Buisson.

Mike Blake, group sales manager for PMI Health Group, says: “Interest in these types of products is growing. But I think there is a little way to go before employers are fully accepting of these sort of hybrid plans because they are unknown, unproven, and they will be sceptical as to whether there is any pay back from them or not.”