HR health and wellbeing special 1/6: Travails of the NHS lead employers to look at health and wellbeing as a business strategy
David Woods, April 10, 2012
As much engrained – perhaps by its very identity – in the culture of the UK as death and taxes, the NHS in England, Scotland and Wales – known as Health and Social Care (HSC) in Northern Ireland – is the oldest publicly funded healthcare system on earth.
Devised and launched by then minister of health Aneurin 'Nye' Bevan in 1948 - who proclaimed "we now have the moral leadership of the world" - the NHS was formulated to provide a general practitioner (GP) and free point-of-use healthcare to any citizen or visitor in the country, funded through the taxation system.
Perceived as a triumph of Clement Atlee's post-war Labour government, the ideals of the NHS in providing services for people from womb to tomb were unprecedented and formed a blueprint for social care, replacing disconnected charity and private healthcare arrangements.
Fast-forward 64 years and while, in essence, the ethos of the NHS remains untouched, patients find themselves paying for private dentistry and struggling to secure NHS dental places; prescriptions - except in Scotland - are no longer free; waiting times for treatments remain a hot topic and GPs can no longer be trusted to sign off the sick from work. Lengthy Government consultations investigate the most appropriate absence-management policies; hospital trusts such as Hinchingbrooke are shunted into the hands of the private sector; and the very fabric of the structure of the NHS looks set to be shaken by the recently passed Health Act, giving doctors more responsibility for their budgets and encouraging competition with the private sector.
The cost of making these changes, which have been put forward to create a more efficient service and save money, are estimated to be in the range of £1.4 billion. Critics of the changes predict the coming few years will be some of the most financially challenging for the largest employer in the UK. In Bevan's time, the challenges to his regime came from doctors claiming the NHS would be damaging to their independence. Things have changed since then.
According to Workplace Wellness Survey, a report from London South Bank University last year, more than half of HRDs think they will have to increase their investments in employer-provided healthcare to fill the breach they believe will be left by the NHS struggling to treat the sick. This will, in turn, fuel growth in the private health market.
But a separate study - Does competition improve public hospitals' efficiency? - from the Centre for Economic Performance at the LSE revealed this could be detrimental to the future of the NHS. The research, published earlier this year, found internal competition between NHS hospitals "improves their efficiency and can save significant amounts of money", but allowing NHS hospitals to compete against private providers has "not produced the same positive outcomes for the public sector hospitals".
The research team found, in NHS hospitals located in areas where there is a great deal of choice among public sector hospitals, patients spend less time in hospital both before and after their surgery.
In contrast, NHS hospitals located in places where there are more private NHS providers have not seen the same benefits after they were allowed to compete. In these hospitals, the research team reported a rise in patients' length of stay in hospital.
So where does this leave employers? As the Government pushes health to the top of its agenda, should employers follow suit and invest further to minimise absence, boost productivity and nurture a healthy workforce? Is it a sign of the times that employers - rather than the state - are going to have to handle the strategy for the healthcare of a nation?
Ralph Tribe, director of business HR at Sky, is unfazed: "I am not too worried about the NHS. It is getting better. GP appointments are more available than 10 years ago."
But when asked about what the Government's role in looking after the health of the UK workforce is, he adds: "I am not too concerned about what the Government is doing. We want to be proactive. As an employer, we recognise health and wellbeing have become more important. I don't want to preach - but to us the importance of a workplace health and wellbeing strategy is obvious."
Sky employs an in-house occupational health team, a full-time doctor, and has fully kitted-out medical suites. "We won't outsource this. It is core," adds Tribe.
"Occupational health is usually a distress purchase and reactive on the part of employees. We don't see it like that. There is a straight line to return on investment and senior managers here have made healthcare a key focus."
The company also provides private medical insurance (PMI), debt counselling and bereavement counselling to all employees and their dependants, right down to part-time or contract staff. Its view is that if employees' dependants are ill, putting pressure on staff outside work, this can lead to stress - and in turn, loss of productivity - within work.
Peter Cheese, chairman of the Institute of Leadership and Management and non-executive director at wellbeing consultancy iGlobal Fitness, agrees wide changes in the economy are making employers more concerned about the wellbeing of their employees, but he doesn't necessarily believe this is on account of uncertainty over NHS provision.
"There is absolutely an increasing focus on wellbeing," he says. "But this is not driven by the debate over the NHS per se. The workforce is under more pressure and this is leading to rising stress, according to the CIPD. Presenteeism is increasing as well and employers are asking themselves if they are getting the most out of their staff.
"There is now a much better leadership understanding of wellbeing and these drivers have brought it into HR, rather than an occupational health side-line. Wellbeing is strategic now - not just part of an employee benefits programme.
"It is too early to say whether the NHS uncertainty will have any impact on workplace wellbeing - and the area is very confusing. What I will say, though, is that when it comes to wellbeing, employers are no longer throwing benefits [such as PMI] on the table - but they are measuring staff absence against PMI costs.
"Employers looking out for staff wellbeing strategically has become the 'new normal'. The reality is that the majority of people spend the majority of their time at work and the idea of employers realising a broader responsibility for their staff is certainly gaining momentum."
Ben Willmott, head of public policy at the CIPD, agrees. Addressing delegates at the Robertson Cooper Business Wellbeing Network Conference on 8 December last year, he said: "During the downturn, employers' wellbeing spend has held up - it is no longer a bolt-on around benefits but is seen very much as part of the leadership and management agenda."
And with the Government putting health and wellbeing higher up its agenda, Dame Carol Black is continuing her mission - now with ex-director general of British Chambers of Commerce, David Frost - to reduce workplace absence. The latest incarnation of their research, presented to the Government in November, recommends an independent assessment service to which employers and GPs can jointly refer long-term sickness absence cases for bespoke advice.
The recommendations have come as a timely spur for HR directors to review their approaches to managing workplace health and wellbeing, as Sonia Wolsey-Cooper, membership and people director at Axa PPP healthcare, explains: "Good people management, led from the top down, responds to [staff wellbeing and sense of belonging] and successful organisations will ensure line managers do their part to create a positive workplace culture where employees are encouraged to live healthy, active lives and respond through their commitment and performance."
But industry experts are divided on how far government legislation should have an impact on workplace wellbeing strategies. Willmott said: "Policy-makers will need to take action - in the future, there could be concerns around psychological wellbeing." The Robertson Cooper conference, where Willmott addressed delegates, posed the question: as the wellbeing agenda continues to gain momentum on a national scale, what are employers striving for and what needs to be done to reach those goals?
At the same conference, Octavius Black, CEO of Mind Gym, added: "I don't think the answer lies in legislation - there are strategies such as happiness training or wellbeing training for staff and there is something key in encouraging staff to focus their energies on how they view the world."
Dean Shoesmith, HR director of the London Boroughs of Sutton and Merton, told delegates: "Number 10 is conscious of behavioural change and works by weapons of influence. The secret is in nudging and persuading people."
Arguably, government 'nudge' tactics on health have had limited effects: it was forced to legislate to make people wear seatbelts in cars and to limit the health damage caused from smoking by banning the use of tobacco in public.
Speaking at another conference last year run by healthcare consultancy WPA Protocol, Dee Edington, founder of the University of Michigan's Health Management and Research Centre, said the onus of health and wellbeing should lie with the employer. He added: "Health is a serious economic strategy. It is not a cost [to the employer] but an investment. You could start by telling [staff] what's wrong with them… Employers with a healthcare strategy are seen as attractive, trusted, compassionate, resilient and optimistic, with high levels of engagement.
"It needs to be strategic, systematic and systemic."
Beauty and pharmaceuticals giant Johnson & Johnson, which has carried out research into the ROI of its healthcare strategy, calculates it makes a return of $3.5 for every $1 it invests in the wellbeing of its US employees. According to Rachel Riley, MD of corporate healthcare trust manager, WPA Protocol, the ROI for a UK wellbeing strategy will be approximately half this amount.
Although the US does not have a National Health Service, it invests the same amount per head in public health (in the form of state-provided health insurance schemes, Medicare and Medicaid) as the UK Government pays into the NHS - but US employer-provided healthcare is "years ahead" of the situation in the UK, according to Riley, who has carried out extensive research into the field.
She explains: "Employer wellbeing in the US works because of the belief 'if you have no job, you have no healthcare'. As a result, in the US, biometric testing and the analytics to measure ROI from healthcare provision are more advanced. But should we emulate this here in the UK - or can we? This is a completely different society and culture and I don't think it's possible to 'lift and shift'."
Riley doesn't believe private medical care in the UK 'competes' with the NHS. "Private health care doesn't undermine the NHS and it is not an alternative to it - the problem exists when employers offer PMI without understanding why they are doing it. It becomes more of a perk than part of a strategy. Very often, it is a director's benefit - but then again, a lot of 24-year-olds could be offered PMI and would choose not to have it because they don't want to pay the tax on it or fill in a P11D form."
Riley agrees with commentators that the Government's wider agenda will impact on employees as they face the fact the more forward-thinking among them will have to invest further in healthcare in a strategic capacity.
"The NHS reforms will not be fundamental to increased employer investment in healthcare," she says. " But there have been a number of reforms - longer working age, for example, and increasing waiting lists - meaning employers will have to consider the wellbeing of their staff."
With the National Health Service a more or less reliable mainstay in the background, the company health and wellbeing strategy can be seen not as disaster recovery, as it sometimes is in the NHS-less US, but as about incentivisation and retention of staff and, for companies in pursuit of excellence, a major differentiator.