Prevention is better than cure

8 June 2009 by LII editorial

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(FREE) Increasingly wellness programmes
aimed at encouraging healthy lifestyles are being offered by health
insurers but often the question is asked: do they yield any
positive results?

The answer is yes in the case of both healthy and chronically ill policyholders, Emile Stipp, a fellow of the UK Institute of Actuaries told delegates to the Actuarial Professions Health and Care Conference held in Glasgow in May.

Stipp based his conclusion on data from more than 900,000 members of South African insurer Discovery’s Vitality Wellness Programme, a pioneer in the concept of programmes and the largest wellness programme of its kind in the world.

The study revealed:

• Fitter people engaged in the programme had 9.6 percent fewer hospital admissions and stayed in hospital 0.57 days less than inactive patients; and

• Medical costs once hospitalised were ZAR5,052 ($670) lower for highly active patients than inactive patients.

Stipp noted that a UK study of 200,000 members of the PruHealth Vitality Wellness Programme reflected similarly positive results. PruHealth is a joint venture between Discovery and UK insurer Prudential.

The extent of savings achieved depends to a significant degree on the extent to which policyholders are prepared to adopt lifestyle and health improvement practices advised by the insurer. Stipp referred to this as the level of policyholder engagement.

“Using similar risk adjustment techniques as for South African studies, we have seen in-hospital private medical insurance costs [in the UK] are lower by between 30 percent and 45 percent, depending on engagement,” said Stipp. “Out of hospital costs are lower by between 2 per cent and 40 per cent, depending on engagement.”

In essence the Discovery and PruHealth Vitality programme encourage policyholders to improve their lifestyles by, for example, quitting smoking, loosing weight or joining a gym. Encouragement is provided to policyholders by way of a points-based scheme that rewards them based on the extent to which they strive to achieve a healthier lifestyle. The higher the number of points earned, the bigger the discount offered on health insurance premiums.

Discovery reinforces its reward scheme by offering members of its Vitality Wellness programme discounts and special offers on a wide range of products and services including health foods, travel, hotel accommodation and Discovery-branded credit cards.

Source: Life Insurance International