Some insurers have taken rehabilitation on board, but others are not convinved of its value. Anita Anandarajah explains
?The accepted wisdom is that rehabilitation accelerates the claims handling process. It gets the insured back to work quicker, and reduces claims settlements in the long run. So why is it not receiving the credit it deserves?
How much money rehabilitation saves has been a much disputed issue within the insurance industry. Some insurers, like Fortis, share the opinion that rehab for less serious injuries like whiplash is often not beneficial. But, for a number of major insurers, rehabilitation is an obvious means of reducing costs.
AIG Europe’s claims review of 30,000 cases (June 2004) highlighted a reduction in claims costs of 20% when rehabilitation was applied compared to cases when it was not provided.
AXA claims director David Williams says the damages amount of a claim is usually less where rehab is involved because the client gets back to work earlier, and pain and suffering are reduced by quicker recovery.
He qualifies his statement by saying that at the moment the data available is not robust enough to see a specific percentage of cost savings. “This means sadly some people are not convinced how beneficial it can be.”
QBE has seen cost benefits in its rehabilitation services in a study carried out on customer accounts in its minor injury management service.
Claims where rehabilitation was provided settled for one-third less than where intervention not been provided.
Rehabilitation services are certainly gaining more acceptance with a number of insurers voicing support for getting the insured back to work sooner, but one insurer says some brokers have in the past been less receptive to rehab.
Paul Woodward, UK employers’ liability manager at AIG, seems to think the tide is turning, after experiencing a fair number of frustrations along the way.
“Brokers have been the least receptive party despite the ABI’s encouragement. ‘ ‘ I do believe now that things are starting to change.”
Woodward pointed to the current soft employers’ liability market as a catalyst for the slow growth of rehab.
“We have little appetite in providing physiotherapy (for low value claims) as it fails to make people better any quicker and therefore adds costs and delays
Nick Gunter, Fortis
“Premiums are continuing to fall and there is over-capacity. Brokers are concentrating more on price and, therefore, there is less need to sell aspects that can help improve a client’s loss because brokers are concentrating on maintaining their book of business. It is a difficult time to sell additional business.”
Williams believes that some brokers have seen that rehabilitation services can provide a new dimension to what is offered.
In light of the perpetual threat of direct writers coming in and competition with other brokers, Williams says rehabilitation is becoming more successful in medium to large organisations because they can see the actual benefits.
“This is very difficult in SMEs. They are concerned about reporting cases too early and therefore attracting unnecessary claims.
“What we need across the board is to get more cases through early. We’re a numbers business. We think it [pursuing rehab] is worthwhile, but don’t know how it works numbers-wise.”
Williams identifies the key problem: the lack of empirical evidence to prove that rehabilitation works. At present there is no regulating body to monitor the quality and qualifications of service providers.
A number of case management standard issuing bodies, such as the Case Management Society UK (CMS UK), Vocational Rehabilitation Association (VRA), Nursing and Midwifery Council and Health Professions Council can provide confirmation of registration of an individual’s membership.
Rosie Corless, rehabilitation manager at QBE believes that access to rehabilitation can be improved through expert knowledge of the market.
“We purchase the services of outsourced rehabilitation providers. Individuals in our in-house team have all worked as case managers and therefore are able to define what services we want from our providers.
“We also audit our providers regularly and we expect compliance with CMSUK case management standards and the recent VRA qualifications.”
Rehab is not compulsory, but the pre-action protocol advises that the claimant, the defendant or both shall consider as early as possible whether the claimant has reasonable needs that could be met by rehabilitation treatment or other measures.
“The wording at the end of the claim form ensures that the offer of rehabilitation is made on every occasion. Although a fleeting reference, it is clear the MoJ considers rehabilitation as a central component
The recent Ministry of Justice (MoJ) consultation paper on how to reform the personal injury system refers to rehabilitation, supporting the view that rehab is a fundamental part of the process.
Emma McMullan, general manager of AIG MR, says: “The proposal for the additional wording at the end of the claim form ensures that the offer of rehabilitation is made on each and every occasion.
“Although a fleeting reference, it is clear that the MoJ considers rehabilitation as a central component – a position which is very encouraging.”
But not everybody in the industry agrees on the glory of rehab. Nick Gunter, technical claims manager at Fortis, says that the benefit of rehab is an illusion.
“In trying to identify people who need rehab (for minor injuries), we’ve come across 10% who would benefit. We have little appetite in providing physiotherapy (for low value claims) as it fails to make people better any quicker and therefore adds costs and delays.
“Other insurers have a different experience. No industry wide pooling of data has ever taken place and in this competitive market it is unlikely to.”
The Fortis experience saw the average length of time of a claim where physiotherapy was provided to be 275 days. Where physio was not provided that period was reduced to 259 days. The cost of settling the claim went up by £135 where physiotherapy was provided.
In its study on 1,000 claims on minorwhiplash cases, Fortis found that physiotherapy did not provide any commercial benefits and, in fact, increased claims costs.
Fortis is currently carrying out a second study to examine the impact of the treatment of 500 whiplash claims to confirm its earlier findings.
Clearly, more research needs to be carried out to identify the strengths and weakness of rehabilitation to take it mainstream.