What is PMI (Private Medical Insurance)

Host: Today I've got my very good friend Gurdip Memmi with us from our employee benefits consultancies team to talk about private medical insurance, more commonly known as PMI. How's things Gurdip?

Gurdip: Very well Martin.

Host: You well?

Gurdip: I'm well, I'm well.

Host: Been busy?

Gurdip: It's been busy it's been a busy period.

Host: Busy time I suppose hitting like we're in April

Gurdip: Yeah I mean, the majority of renewal dates are between January and April. So always a busy time of year for us.

Host: Does PMI fall into this space this time?

Gurdip: Yeah generally all renewal dates come out once and when you're dealing with 35 - 40 clients yeah they're all coming at the same time so busy yeah.

Host: So today we're talking about PMI so can you just give us a little bit of an overview for those that don't know or only know a limited amount of information about it. What is PMI from an employer's perspective?

Gurdip: Private medical insurance is a policy which provides employees with access to private treatment. So the private treatment that we're talking about under a private medical insurance policy in the UK is your referred treatment, so if you are ever told you need to go and see a specialist consultant about diagnosing a condition that's where private medical insurance kicks in. So instead of going to the NHS, instead of employees picking up the phone and going via the NHS they'd pick up the phone and speak to the PMI provider. Yeah exactly. So the typical journey would look like you go for a GP appointment you're going to do some sort of Investigations with the GP they get some test results back and they'll say. Your test results will come back as X we're going to need to refer you on to your specialist consultant and they would normally give you a named consultant and that waiting list will be depending on the specialty will be a certain period of time. For someone with private medical insurance at that point the conversation changes to say to that GP can I have an open referral letter and then you contact your private medical insurance provider and then you can book your appointment with a specialist through the medical insurance provider.

Host: So why is it important for businesses to have a PMI policy in place?

Gurdip: Great question. Being completely transparent, if you're going to have a private medical insurance policy in place. In terms of budgetary requirement it's alongside your pension as one of the most more expensive benefits that you can offer. But the benefits of it is really about the intangible things. So if you've got an employee who you won't necessarily know has got some medical concerns and they're going through those investigations and they've been told you're going to need to see a specialist and that waiting list is 18 weeks? That's 18 weeks where that employee may not be mentally 100 focused.

Host: So what's the cost of that employee not being 100 present in the workplace?

Gurdip: So productivity, absenteeism all those things come into play and that's an intangible cost like it's very difficult to put a cost on that. Private medical insurance can ensure family members as well okay so for example on my medical insurance policy I've got my wife and my children. If something was happening with my wife and she's unawaiting this with the NHS again that impacts me.

Host: That's stressful for you isn't it?

Gurdip: Exactly and it's about the speed of being seen by a consultant so that that waiting list that is potentially 18 weeks becomes a week that's how quick the policies can come yeah.

Host: So when you go through that referral can the employee choose who they go and see?

Gurdip: Yes generally what will happen is the medical insurance provider will suggest three people based on a location that the employee shares with the provider. Generally what you can do is you can do your research on those consultants. So what is their specialties how many people have they seen how many surgeries have they completed in line with that special so you get a lot of information and then you choose which consultant and contact the secretary and make that appointment yeah.

Host: So that gives the choice aspect back to the employee?

Gurdip: Yeah, so they're not just told you're going to see this person yeah there are where budget is is a big consideration there are options now where the medical provider can take an employee's case look at their panel of consultants and suggest that this consultant would be the best consultant for you. But that's a different option yeah available in private medical insurance.

Host: And that's something there's a business here at NFP we could we can suggest that to our clients or prospects?

Gurdip: Absolutely if you're going through a review of the plan all of these things should be discussed as I said there's a lot to a private medical insurance plan a lot of things that need to be considered and those conversations can be shared by budget or I want to offer the best plan possible or I want to offer a version of private medical insurance. Any sort of discussion along those lines there's an option for that.

Host: So you mentioned the word review there yeah, how often is a PMI policy reviewed or how often would you recommend as a an expert in this field as a consultant how often would you recommend an employer review their current PMI policy if they've got one?

Gurdip: It's got to be every 12 months every renewal you should be reviewing that policy and I'll tell you why. Private medical insurance it is the one employee benefit that will have an increase every year. That increase can be between eight to fifteen percent as standard okay that's without claims experience.

Host: Why is that?

Gurdip: So that's medical inflation it's also based on age so everyone's a year older which means yeah premiums go up. Those two things alone can amount to an 18 to 15 increase. On top of that if you've got a policy in force and there's been claims activity on that policy the biggest clue that this claims activity on the policy because as I said you're probably not going to get a lot of Mi depending on the size of your plan is if you go over that 15 percent. So you imagine you're not reviewing your plans every year, you're absorbing a potentially 15% upwards increase every year. Whereas if you benchmark that plan against the competitors there's a chance of getting that cost saving.

Host: With your clients when you're reviewing them how I know it's a bit of a kind of open-ended question a difficult one to answer but. Are you moving providers every year or does it have to happen often?

Gurdip: No, so as part of the review process private medical insurance is a very emotive plan. Members are engaging with that insurance company, it's not like your life insurance, or your income protection policies where employees aren't speaking to those companies. Private medical insurance if you want to use it you need to speak to that insurance company. So that interaction is very important and if your employees are getting a good service from that provider there's no real need unless there is something else on the agenda yeah to be looking at another provider. If you're getting real negative feedback from the employees and the cost increase is zero that's another sign that you need to be reviewing and potentially moving it away because what you're paying for on private medical insurance policies is that claimed experience, that experience that your employee has got a medical concern they're speaking to the insurance company, are they getting put with the right Consultants has it been a seamless process? all these things need to be taken into consideration.

Host: So employee feedback is hugely important huge, and do you find how do you get that feedback from some of your clients employees?

Gurdip: Generally if an employee knows who the contacts are at the company that they can talk to about employee benefits and they go for a bad experience they'll be telling their contacts. But what I encourage my clients to do is put out a survey just to get a feel for what people think about the benefits because that gives you a good steer then of what you should be thinking about when you're reviewing the benefits. If I got a meeting with no feedback from the client the things I'll be looking at is what does a cost increase look like, what is my experience of the provider that the clients with, what have I learned in the last 12 months about that provider, what new things are they offering that could be of potential interest. Those are the kind of things that you'll be looking at but employee feedback gives you a much more meaningful reason for a review.

Host: So we've talked on reviewing so I mean with reviewing it that just that assumes you've already got a policy in place. What would you say to somebody that's heard about PMI a corporate client that's heard of PMI that don't have a policy in place? what are there three things that you'd you could pinpoint that to make to make them kind of?

Gurdip: I mean the three questions I would probably ask myself if I was an employer who doesn't offer private medical insurance is? how are you going to measure the cost of absentees and can a private medical insurance policy help with that cost? when you look at your competitors private medical insurance is a highly sought after benefit so when you're looking at your competitors are they offering private medical insurance? depending on your industry majority of your professors probably will be and the third question is you know why are you not offering private medical insurance once you know the benefits of it and what it can do for your employees what is it that's stopping you from that benefit is it budget restrictions?
Because if you're looking at it and thinking it's too expensive there are alternative options. You might not have the all singing all dancing private medical insurance policy but there's certain providers out there now where you can tailor your plan quite heavily so you can offer a version of private medical insurance.

Host: Is that something if someone got in touch with you would you pull the options together and build that proposal for them just so they can see the pricing options or whatever?

Gurdip: Yeah it would be a conversation of what are you looking to provide? What does your budget look like because it is quite a complex benefit and there are tweaks that you can make to that benefit which changed the pricing dramatically. So after a good conversation with somebody who wants to talk about private medical insurance you can pretty much go away and know which provider you're going to approach and what options are going to be suitable if you obviously know what your looking for.

Host: Fantastic so I mean this was probably a question that I should have asked right at the start so when we're talking about PMI, is this only big companies that offer it or can how how many employees can you go to?

Gurdip: For a group private medical insurance policy you can actually have one with one employee, so it's designed for everybody you don't have to be of a certain size. It does change your options a little bit depending on your head count so if you've got five employees for example. The medical underwriting on that policy will exclude pre-existing conditions okay whereas if you've got 15 plus employees, you can then be looking at medical history disregard is what it's called and what that effectively means is pre-existing conditions can be included on claims and obviously that's where your employees will be most comfortable. Because you'll be offering a plan where there's no exclusions per see. One of the major things that people need to understand about private medical insurance is it covers acute conditions so acute conditions are a condition that you have that can be cured and you can be put back to your original state of health.

Host: Can you just give us an example? Broken leg?

Gurdip: You can repair your leg and start walking again. Chronic conditions are not covered so asthma, ultra ulcerative colitis, crohn's disease. Those kinds of things, yeah that's really important to understand your private medical insurance because I think common misconception with private medical insurances I've got it I can just go and get treatment wherever I want whenever I want, for whatever I want, there are still some restrictions on it but an effective communication plan can kind of explain what our private medical insurance plan is designed to do.

Host: So a bit of a case study, have you got any case studies or do you think have you ever used it? I mean I've got my two daughters on it myself and my partner Heather. Have you ever used it?

Gurdip: I have. I've talked to you about my example. I'll speak to many clients about my example it's a real it gives a real good understanding of how it works in practice. So this is going back to 2017. Went to the GP had a few issues um in the stomach area, did a few tests, GP said you need to go and see a specialist. The waiting list 13 weeks is what the GP said, yeah that's fine went back to work, remembered we've got private medical insurance yeah and I thought let me contact them. Contacted them got through to the specialist team to go and see the specialist that I wanted to speak to and before I did that I probably did one of the worst things that anyone can do and googled what my specialist consultant can do. And obviously the first thing that comes up is cancer and I'm now I'm stressed out so I've contacted the private medical insurance provider at the time and they gave me that I think this was on a Tuesday and by the Thursday I had my first consultation and don't forget my GP told me there's a 13-week waitlist and I'm in front of a consultant two days later. Within the week after the initial consultation, my consultant knew the path that we were going to go there so diagnostic tests for the week after. Within a week not 13.

So now we're on week two and I've had my diagnostic tests and I'll give you a little bit of an insight about why private medical insurance is a highly sought after benefit. If I went for diagnostic tests where I required a day bed I would have been an a ward of 8 - 10 - 12 people. In the ward that I was staying in there's four beds and the area that we're sitting in was probably the size of the ward that I had right so it was absolutely spacious. When I used to go for consultations, I don't know if you've ever had a hot drink from the NHS hospitals, but the quality of everything was just better in the private setting. The consultation rooms were huge seen on time my appointment was outside of a work hours, designed to suit me. Diagnostic tests happen during work hours which is fine because you need to be in that hospital setting. Had my diagnostic tests two weeks later got my diagnosis of what my condition was so, in the span of four weeks I knew from going for the investigations to consultation Diagnostics to diagnosis yeah four weeks. That is before I would have even got an appointment in the NHS, like eight weeks before

Host: Just think about it, let me put in the fact that you're in employee benefits consultant to one side. You're an employee of NFP how did that make you feel? I suppose the that's almost like a relief yeah isn't it a relief and a your relationship with NFP is stronger than because they've provided this for you? they've helped you through this otherwise you'd have been just left to your own devices?

Gurdip: As an employer benefits consultant I've heard of other cases where cancer diagnosticism you know quite serious conditions where there is that strength of relationship between employee and employer, because the perception is I was able to access these services because my employer provides them. So that's really important to understand, that reputationally when that employee is out with their friends and talking about their personal situations and my employer offers this. That's a great endorsement for the reputation of the business.
It's a great recruitment tool isn't it absolutely recruitment retention
Yeah and it comes back to all your competitors offering private medical insurance and then if there's people within the organization with examples of how private medical insurance has helped them, it's a significant factor which is why it requires the investment that it does. There's real value in that massive and it's like with any product you only find out how good it is and how valuable it is when you use.

Host: Fantastic so I think we'll leave it there I think, I mean that's opened my eyes up to the kind of yeah to PMI yeah it's been really useful speaking to you today so hopefully you enjoyed it too. If you do have any questions for us here at NFP about PMI or any of the other benefits that we could support your business with please just visit our website at nfp.co.uk or drop us a line at enquiries@nfp.co.uk.

Thank you very much, cheers thanks