With continued debate about the value and worth of rehabilitation to insurers, Post, in conjunction with AIG Medical and Rehabilitation, held a roundtable to discuss developments. Jonathan Swift reports
Under discussion around the table were issues such as has enough been done to benchmark claims and should there be more dialogue between claims departments and rehabilitation providers, and if so, what shape should this take? Is the market too fragmented and populated by too many small companies for insurers to take it seriously?
AIG regional technical and strategic manager, casualty claims, John Higgins kicked of proceedings by saying, in terms of employers' liability, his company had undertaken a benchmark survey of 30,000 EL claims. This compared those policyholders who had worked with AIG Medical and Rehabilitation against those policyholders who had not. "After a great deal of cross checking and analysis, we were able to demonstrate savings of around 20% on the overall incurred cost of claims could be achieved through effective case management rehabilitation. I am not aware of any other survey in relation to EL that has considered as many claims as that," he added.
Corpore client relationship manager Wayne Herbert responded: "I think you have hit the nail on the head there. Many insurers are at different stages in their evolution of benchmarking rehabilitation services. Some are fully integrated and they are looking to benchmark, while others have tried rehabilitation at the very beginning and have remained sceptical. So there needs to be some consensus by the rehabilitation industry and also by the insurance industry in terms of sharing their data and results."
Chair of the International Underwriting Association/Association of British Insurers rehabilitation working party, Mark Baylis, reflected that it conducted research two years ago, which asked a question about the cost effectiveness of rehabilitation. It found that with large injuries there is a consensus among insurers that rehabilitation is cost-effective. At lower levels, however, he noted, insurers fell into three different categories. "There were those that had tried rehabilitation and thought it was saving them money, with 20% the figure that came up yet again," he continued. "There were insurers that had tried rehabilitation and were unhappy at the financial outcome and there was a third category that holds the balance of power, which is companies that are still evaluating the cost-effectiveness of rehabilitation.
"There is a real need to get senior claims people and rehabilitation providers together to exchange experiences in a non-competitive way so that we can identify why it is that some insurers dealing with the same sort of claims as other insurers get completely different results when it comes to rehabilitation."
It's good to talk
Kynixa chief executive officer Ray Shannon thought that dialogue was important because it was unreasonable to expect any decent research to come from individual rehabilitation companies because these providers are relatively small, as are the volumes they are dealing with.
"My suggestion would be that we look at this collectively. Between us we have many cases and can produce some good evidence in terms of outcomes and benefits. We could consider working with one of the universities to create a proper research protocol. There has got to be a much more open approach because everyone is working in the dark."
IPRS group chief executive David Bingham interjected that he believed the issue is not so much the proof of the clinical benefits, but the proof of the commercial benefits. "And I would question whether or not it is our job to prove to an insurer that commercially it is cost-effective for them to do it. They all have a different cost line that they are working towards, and I think it is for individual insurers to make the decision whether or not the service that they want is commercially viable for them. For me, the clinical argument is not there any more. There is a great deal of evidence."
As the discussion turned to whether rehabilitation service providers should wait for insurers to prove the value in rehabilitation, as Mr Bingham suggested, Treatment Network client services director Chris Kenber commented: "If you wait for insurers to do this, you will wait a very long time because, traditionally, they are wary, cautious, bureaucratic, slow-moving organisations. They are also slow to put the information that they do have in the public domain. Two I can think of are Norwich Union and Zurich. They do but most don't, and most individual providers don't have sufficient databases to put the information together."
Premex chief executive Simon Margolis added: "The problem you are potentially going to have is that insurers will have to pull out the management information and demonstrate to themselves that there is a cost benefit. This a) relies on them getting the necessary information and b) crunching the numbers. I don't think that we can help them get there. Ultimately, they have to do that themselves."
Argent rehabilitation services director Deborah Edwards agreed, but cited insurer legacy systems as a possible hindrance, while Mr Herbert said the change in the amount of variables involved from NHS recoveries to whether someone has physiotherapy did not help benchmarking either over time.
Mr Baylis offered his belief that he would rarely question the insurers' figures, but insisted that he did think rehabilitation providers should not be "entirely passive" and wait for them to decide on the benefits.
"If insurer A says rehabilitation is costing them 10% more than they are getting back, I would not question the figures but I would want to know why. I would want to know how they are doing rehabilitation - and I bet you will find that they can improve."
AIG Medical and Rehabilitation corporate manager Tara Hinkley said: "But you can have two people with exactly the same injuries and the fact that one person is far more determined to have successful rehabilitation means the success rate could be different depending on the two personalities."
"I do agree with David that companies have different cost bases," commented Ms Edwards, "but at the moment there is nothing that we can hang our hat on and say that, as rehabilitation providers, there has been a cost-benefit analysis to the insurance company. If there was a benchmark, then insurance companies could see how that impacted on their cost base and we would at least have something to go forward with.
"I am not saying that every insurance company has to have the same MI but if they bought into and agreed on a benchmark then that would be really good. Because then insurers would look at it and say hang on, everyone else has said that they are saving 20%, we are only saving 10%."
At this point, Mr Baylis referred back to IUA/ABI research of 220 claims handlers that found 99% agreed that insurance companies should consider rehabilitation, overwhelmingly endorsing it as something that helps the claims process. "And, incidentally, the main reason why they thought that rehabilitation was a good thing was because it improved relations and communication with the claimant and their lawyer," he said.
Offering a claimant solicitor's view, Grahame Codd, regional managing partner at Irwin Mitchell, said: "In our experience, there are a small number of insurers with whom we have good communications and we have good response and can work in a collaborative way. There is probably a similar sort of number of lawyers on the inside. But unless you start seeing universal behaviour, it is very difficult for us to reciprocate."
"However, as a claimant lawyer, you have got the whip hand," interjected Mr Baylis.
"Yes, and we don't hesitate to use it but the point is that it is not effective right across the piece," responded Mr Codd. "An adversarial system is not necessarily helpful for the claimant's psychology in terms of doing their best to progress when they have got litigation hanging over their head."
Lyons Davidson Solicitors consultant Keith Popperwell reflected on the US experience where the insurance industry's point of view is 'we are not going to use a rehabilitation provider unless they tell us what their success rate is' - but questioned how their success rate is measured?
"There is a very big difference between here and the US and that is the NHS," continued Mr Bingham. "And the difference is that, as an individual, you have already contributed to the NHS by your National Insurance, whereas in the US you haven't - you have contributed to private health care one way or the other. And so the way to turn this around is, rather than the NHS claiming back from the insurers for providing services, why don't insurers claim back from the government or the NHS for providing the services privately themselves."
AIG Medical and Rehabilitation managing director Melanie Summers commented: "In the US, rehabilitation is compulsory. So while we have a voluntary system, it is still difficult to calculate what savings there could potentially be because there are all sorts of problems, certainly from a rehabilitation provider's perspective in the time it takes to be notified of somebody who has been injured. We have some clients where it takes them over a year just to notify them, by which time the cost associated with getting that person back to work is much higher than if you had been involved six or nine months earlier."
The conversation then turned from benchmarking to the state of the market, and how small providers would continue to exist in such a fragmented and fledgling market where insurers cannot benchmark who the best firms are, with Mr Shannon commenting: "I have only worked in the sector for a year. During the majority of this time I have felt like an imposter in a market where I have got something to sell but there are few customers who are convinced that they want it.
"Unless something happens to change that, we are going to struggle as companies. We need some more maturity about whether our products or our services are needed. If people need our services I think we can do huge amounts to demonstrate benefit, value, worth and good outcomes."
Zurich Medical Management Centre manager Spencer McCabe said that, because of the uncertainty over the quality in the open market, his insurer effectively created an in-house resource in 1999.
He said: "Now as we have moved forward and political situations change within organisations, we still have the in-house resource but we need to buy external resource to supplement what we do in house. When we do that, it is difficult to decide which provider to go to, because of the lack of continuity throughout the market. It goes back to what Deborah was saying - unless you get that sort of benchmark you don't really know who to go to."
Ms Summers interjected: "And that is one of the other issues, of course. We are still in an unregulated environment and working within an industry that is highly regulated."
Mr Codd highlighted that confusion did not just stop with insurers: "From the claimant's perspective there is a lot of confusion around who should be providing the service. And, naturally, they go to the NHS, where generally speaking people get pretty good service in the acute phase. Then it starts to get a bit patchy around the country, because it depends where you have your accident and where you live - that can certainly influence the outcome.
"The other feature that is critically important here is the psychological preparation of the claim for rehabilitation. It is all very well making rehabilitation available, but the claimant needs to have the right mental approach too. We have got claimants for whom we can access funds from insurers and I am thinking of one guy in particular who psychologically just won't accept his prosthetic limbs.
"He just chucks them across the room and swears and we all might do the same in that situation. But a degree of psychological preparation for that guy might go a long way towards improving his attitude towards the treatment and his ability to rehabilitate and motivate himself. Because without that, no matter how much money we chuck at him, it is not going to work."
Mr Herbert continued: "That is an interesting point if you take it right back. We talk to insurers about rehabilitation but is anyone talking to the general public at large? If someone has an accident they expect to get a hire car. But do they ever ask why they aren't getting rehabilitation? Is the knowledge out there with the general public?"
Bodycare Clinics chief executive Bippon Vinayak said: "Just picking up on education, it is key because there is a great deal of confusion. It has been mentioned that claimants get confused about who is supposed to be treating them, why they are treating them and what they are treating them for."
He added: "So I think if we can agree something here I would love it to be about an assessment at the outset, or to try and categorise what we have been talking about so that can then permeate all the way down the line to the claims handler at the other end."
Mr McCabe supported this: "I entirely agree. It is all about the quality of the information that you get at that stage. It has been mentioned that there it is a nine-month notification time frame for an EL claim. It is about twice that for a PL claim.
"And my experience is that you look at the beginning of the file and you see a solicitor's letter that says 'this is the injury' but the quality of the information that allows a claims handler to make a) an accurate valuation on the claim and b) have the right thought processes in place for rehabilitation - just does not exist. You don't know whether the claimant is working, whether they are not working, whether they are having ongoing treatment or not. The claims handler just does not really have the necessary information."
Matthew Young, policy adviser, liability and occupational health at the Association of British Insurers, concluded: "There is a huge amount more rehabilitation that could be done if you forget about it being linked to insurance policies and if you just think about it in terms of anyone who is off work and likely to be off work with a condition for a certain amount of time.
"Some people have to wait weeks or months for the NHS to start their rehabilitation. So the question is, how do we encourage employers to make some kind of private provision if they judge that to be right? If you did, you could open up a vast amount of extra potential in the market."
Mark Baylis, chair of the IUA/ABI Rehabilitation Working Party, IUA
David Bingham, group chief executive, IPRS
Grahame Codd, regional managing partner, Irwin Mitchell Solicitors
Deborah Edwards, rehabilitation services director, Argent Rehabilitation
Wayne Herbert, client relationship manager, Corpore
John Higgins, regional technical and strategic manager - casualty claims, AIG
Tara Hinkley, corporate manager, AIG Medical and Rehabilitation
Chris Kenber, client services director, Treatment Network
Simon Margolis, chief executive of Premex Group, Premex
Spencer McCabe, manager, Zurich Medical Management Centre
Keith Popperwell, consultant, Lyons Davidson Solicitors
Ray Shannon, chief executive officer, Kynixa
Melanie Summers, managing director, AIG Medical and Rehabilitation
Jonathan Swift, editor, Post
Bippon Vinayak, CEO of bodycare clinics, Doctors Chambers
Matthew Young, policy adviser, liability and occupational health, ABI
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