Could tax incentives entice firms to spend on OH? The insurance industry seems to think so, and is lobbying the Treasury. Nic Paton analyses their chances of success
Work and pensions minister Lord Hunt has said he can "understand the psychological importance" of it, OH tsar professor Dame Carol Black is to buttonhole officials at the Treasury about it, and health insurers are becoming increasingly vocal about its merits. One way or another, what might once have been thought a somewhat arcane issue -- that of tax incentives in return for investment in workplace and occupational health -- has suddenly become a hot topic.
Certainly, as Tim Baker, commercial director at Norwich Union Healthcare, concedes, there is what in
"I do not expect the government to simply come up with an announcement that they are going to put fiscal incentives in place," he explained. "There is a further way to go, but there is a degree of momentum."
So, what's the issue, why has it suddenly become important, and what's it all got to do with hard-working OH professionals?
Last October, Norwich Union, one of the key drivers of this whole debate, published a lengthy report commissioned through NERA Economic Consulting that largely encapsulated the health insurance industry's thinking.
The research made it clear that, whatever the Department of Health (Doll) may say, the reality within the NHS is that there is little incentive to prioritise workplace health interventions, because other competing pressures are simply too great.
Yet, while employers have an obvious incentive to invest in workplace health, in making decisions they will often, quite naturally, look more at the payback for them rather than the benefit to society as a whole.
Also, the benefits of early intervention often only became clear over a long timeframe, which, as employees change jobs, further reduces the implicit incentive of spending money on their health.
This situation means the supply market for workplace health interventions and rehabilitation (such as physiotherapy and psychological therapies) remains weak, partly because of low demand and also a lack of innovation in product design.
Compounding this is the
Fiscal incentives, such as tax breaks, matching funds or offsetting NI contributions (see box, right) could therefore encourage many employers -- particularly in the private sector -- to bite the bullet and invest more in workplace health intervention, argued NERA. Incentives should ideally focus on musculoskeletal disorders, mental illness and return-to-work schemes, it advised.
Tim Baker explains: "We have to be realistic that this is not going to be an area where the NHS is going to be able to plug the gap. I certainly think the economic argument is quite strong and the appeal to the government is around the competitiveness of UK plc.
"We could find ourselves falling behind with what is happening in other countries. In
Dudley Lusted, head of corporate healthcare development at insurer AXA, added flesh to this thinking in a wide-ranging speech to a fringe meeting at the Labour Party Conference last autumn.
"I believe that, while some organisations have proved the link between good health and improved performance, the data is patchy and because budgets are always tight it is hard to find new money," he said.
"I am convinced, however, that wavering companies will find significant new money if the pump is primed through a reduction in tax, and their imagination captured through an innovative communication programme," he added.
What Lusted then went on to propose was that the government should create an approved healthcare programme that, when implemented, would attract a reduction in NI contributions of, perhaps, 1%.
This programme would obviously need to be defined, but would need to include prevention, risk assessments, health promotion education and some level of management training, probably delivered through the internet, he argued.
"I envisage various documents describing best practice with guides on how to manage absence, how to identify stress, and so on.
"The programme should also include rehabilitation -- for example, to pay for private treatment for those medical problems that prevent employees from working," he said.
"The programme could be audited by a newly-enfranchised HSE through a combination of employer health policy reviews, staff audits and possibly some hard measures -- for example, some combination of absence and injury data," Lusted outlined.
"Direct financial incentives are likely to capture the attention of busy employers and therefore make the most difference to improving workplace health," he recommended.
But before OH practitioners start punching the air in delight at the prospect of workplace health being "pump primed", they need to recognise that there is the rather immovable obstacle of the Treasury to get past first.
There are, it appears, genuine differences of opinion within
While the Department for Work and Pension's basic position is that reducing the cost of absence and improved productivity should be incentive enough for most employers to spend money on workplace health, there is a sense ministers do at least see some merit in what they are being told.
Similarly, the Doll has been making enthusiastic noises about the need for more investment in workplace health for a number of years -- as witnessed by its ongoing commitment to, and investment in, NHS Plus and its public health agenda, much of which has a workplace health element to it.
But go to the Treasury, where any decision of this nature will actually be made, and the words 'bucket' and 'cold water' tend to spring to mind. As spokesman Nic Stevenson explains to Occupational Health, taking a sword to the Gordian knot that is the British tax reliefs system is not something high on Chancellor Gordon Brown's priority list.
"In setting tax reliefs, the Treasury considers whether or not they are the best incentive to encourage the desired behaviour," he explains. "In many cases, tax is too blunt an instrument to change behaviour, and is not the best tool to use.
"For instance, tax breaks only benefit businesses that make a taxable profit, and businesses will have to wait until the end of the tax year to realise the benefit of a tax break. In addition, incentives such as these complicate the tax system, and increase companies' administration burdens.
"In the case of workplace health schemes, it would be very hard to ring-fence these schemes, or any other vocational rehabilitation, from 'ordinary' private medical insurance provided by an employer, which is subject to tax and NI contributions on the employee," he continues.
The preferred approach, at least in the eyes of No 11 Downing Street, is to focus more time and energy on existing schemes.
Stevenson cites in particular the expansion of NHS Plus, the government's £1.6m Well@Work pilots (nine "healthy interventions" looking at how the health of employees at workplaces can be better improved) and the work by the Doll and Investors in People to incorporate workplace health standards into its award scheme.
And, he points out, there are already fiscal incentives available to employers in relation to workplace health investment. While employers are taxed on medical treatments, insurance and gym-memberships, there are other services not taxed as a benefit in kind.
These include treatment of work-related conditions or accidents, health screening and check-ups including eye tests, welfare counselling, equipment and services for disabled workers and in-house recreational facilities, such as gyms or sports facilities which can only be accessed by employees.
"In addition, VAT is reclaimed by businesses on expenditure directly related to the health and wellbeing of their employees. For example, VAT is reclaimable on the purchase of occupational health advice," Stevenson adds.
There are wider questions too that have barely been raised in the debate so far, worries Joanne Hindle, corporate services director at Unum Provident. Not the least of these, as repeated in almost any debate over the future of OH, is 'Where are the OH professionals going to come from to do this extra work?'
As Hindle puts it: "Even if it did happen, and it was announced it would be brought in next year, there is actually a very limited supply of people out there. OH specialists are not wandering the streets looking for jobs"
What's more, if small and medium-sized enterprises (SMEs) are the great black hole that OH needs somehow to plug over the next decades, tax incentives could in fact be a hindrance rather than a help, she argues.
"It is much more around the whole environment for health in the workplace not just OH. It is wider than tax efficiency. Some companies, for example, are never going to have access to in-house OH so, by default, you disenfranchise every SME from the tax incentive," she points out.
"You have to be very precise what you can give taxbreaks for," she adds. Taxbreaks, if implemented too narrowly, may even, inadvertently, end up limiting the range of workplace health initiatives a company might consider putting into place.
The issue may have 'mo' and there are always merits in having a debate. To be fair, advocates such as Lusted and Baker are realistic enough to recognise there is unlikely to be any favourable decision on this any time soon. But, with Gordon Brown almost certain to become prime minister this year, and the NHS and public sector being financially squeezed, how likely is it, either politically or in reality, that the government is going to turn around and shower cash on a sector already seen by many to be doing very well thank you?
In Hindle's eyes, at least, the message to OH professionals therefore has to be "don't hold your breath".
"With the public sector spending review next year, I just do not think there is the money there. There is such a small chance of success, maybe the industry should look at other areas," she advises.
"It is a slightly odd approach," Hindle concludes. "It is too narrow, they are pushing on a very dosed door and there are not enough people to do the job. We risk under-qualified people offering themselves instead."
~~~~~~~~
By Nic Paton
No comments:
Post a Comment