Moving offices means different things to different people. For Medisure, relocating to its new offices in the centre of Bristol represented a very positive statement about its business strategy for the 21st century.
Before the move, Medisure was situated in an old Georgian building in the red light district of Bristol. “Because of the style of the building and fire regulations we were very restricted in how we worked, “ explains Medisure’s marketing manager Chris Moore. Each team was very much isolated in separate rooms, often behind closed fire doors.
The new offices are virtually the antithesis of this. The open plan design is decidedly space age with features such as the main computer displayed in a glass cabinet. Employees’ needs are also well catered for, with break out areas, canteens and hi-tech training areas.
Getting the right atmosphere in the office was very important to the management team at Medisure. “The new offices are a statement for Medisure,” explains Andy Dean, group sales and marketing director. “It’s a state of the art service centre which enables customers to see the investment which has been made into the business.
“The new design also allows us to have focused teams concentrating on customer service. And it’s a statement to the market that we have relaunched.”
The relaunch is important to Medisure. Although it is the UK’s largest provider of third party administration (TPA) services and can trace its roots back through several incarnations to 1974, the last few years have seen it keeping a relatively low profile in the market. “There had been under-investment in the company but it is very different now. Our modem, focused, forward-looking image reflects this,” adds Dean. “Clients want to do business with similar businesses and so far everyone visiting here has been very impressed.”
Another factor which Medisure is keen to leave in its past is its relationship to Sedgwick. In 1993, then owner Sedgwick incorporated Medisure into Sedgwick Health Care Management; a division that combined both TPA and consultancy services.
“When we were part of Sedgwick, people saw conflict,” explains Dean. “Now this has been unbundled and we are very separate, we have seen intermediaries switch business to us.”
Indeed, with the busy renewal period about to begin, Medisure has already seen a large increase in requests for new business quotes from intermediaries.
Part of the impetus to change Medisure’s positioning came as a result of Sedgwick being taken over by the world’s largest insurance services and risk management business, Marsh & McLennan, back in October 1998. With an eye on the wider picture, the decision was taken to make Medisure a stand-alone company in the Seabury & Smith division of the business. And, to confirm its belief in doing this, Seabury & Smith made a substantial investment to improve technology and Medisure’s infrastructure.
But Medisure does not believe the increase in intermediary interest is simply a result of its new-found independence and relaunch into the market. “I expect TPA business to grow substantially in the next few years,” says Moore. Although figures are difficult to gauge, estimates suggest that currently between 15 and 20 per cent of the PMI market is handled by TPA providers, accounting for roughly 0.5m fives. Additionally, some 150 trusts have been set up for corporate business which cover more than 300,000 people. Taking the current tax situation into account these figures are likely to rise further.
The cost of offering company-paid PMI rose sharply in April when an additional 12.2 per cent National Insurance charge was introduced. Using a trust for medical benefits can help to lessen the corporate spend on PMI. While a trust will not avoid this levy, it can side step insurance premium tax, saving a company five per cent on its medical benefits bill.
As well as corporate clients looking for a more tax-efficient way to offer medical benefits, Medisure predicts an increase in business as a result of its prudent approach to claims management. At a time when medical inflation is in excess of 10 per cent a year, Medisure can boast a meagre five per cent rise in claims costs for the last three years. Medisure’s claims costs have run at approximately 30 per cent less than the market average and a recent report from Laing & Buisson estimated that TPA’s claims costs were roughly half those of insurers.
Moore believes these savings are a result of tight control over costs and active management of the claim from day one.
“We manage the claim all the way through,” he explains. “At the front-end we have medically qualified staff who can determine whether a claim is covered by the person’s policy. On average we can pre-authorise a claim in three to four minutes.”
At this stage in a claim several aspects which can affect cost are examined. These include whether the treatment is available on the plan; whether the selected hospital is covered; and whether the consultant’s fee is reasonable.
Taking these steps not only stamps out unnecessary costs but also ensures that customers do not incur any expenses they may think are covered by their insurance.
But Medisure’s claims control doesn’t stop at the initial point of contact. Backing up the experience of the medically qualified staff are protocols which ensure the most appropriate treatment is being given to customers. Additionally, any claim that involves a hospital stay of more than four days, or with a cost above a certain limit, will necessitate a greater degree of claims management.
To be able to offer this service properly, Dean says, it is important to treat the management of the whole process as a fine balancing act. “You really must keep on top of service,” he explains. “Otherwise you find you drive up the volumes in other areas of the administration process. We have a 10 day maximum claims turnaround period which we are working to bring down to five days. This prevents call volumes from rising.”
Giving customers dedicated service teams is one way in which Medisure is ensuring rapid turnaround. Dean says: “Ownership of the client is very important. Clients like to have this approach too: their calls don’t get bounced around.”
Not keeping on top of queries, Dean believes, is behind the problems some of the insurers have. Customers submit claims, hear nothing until they are chased by the hospital or consultant, then call the insurer to chase the claim, which in turn takes up the insurer’s time and delays it from paying the claim.
Medisure operates a service guarantee to help control its internal administration processes. “We’re an administration company,” says Dean. “We provide service and we should be measured on this. If we don’t provide the levels of service we promise, we will pay a penalty. You can never take your eye of the fundamental service elements-it’s what the client wants.”
However Dean admits that it may take some time to convince people that service really is key to having a solid long-term PMI proposition. In the past clients may have bought on price rather than service, but now, he says, they can have both.
The range of products and services which customers can access through Medisure is immense. Moore explains: “We do not offer off-the-shelf packages: we’re here to provide solutions. A client can fund their scheme any way they like and have any options they want.”
Included within the range of solutions on offer at Medisure are fully integrated healthcare administration services; a variety of funding vehicles from fully insured to trusts and captives; choice of underwriter; and full plan design and implementation.
But if size or budget doesn’t allow this level of tailoring, Medisure also offers ready made solutions. For example, at the beginning of April 2000 it launched a PMI range, Health Protector, which covers individuals and groups with up to 99 members.
Again flexibility has been key to product design. Customers can select from three levels of cover; different types of underwriting; and five excess options.
Backed up with competitive pricing and service standards, it is certain to attract new customers. And Medisure is ready. Of the 200 desks in the new offices, 90 are empty, waiting for new employees as the company expands. It will also be able to handle greater volumes of quotations and claims as it moves away from paper-based documentation towards internet and intranet communication.
Medisure certainly has big plans for its re-entry into the market. And, by combining its tried and tested experience of delivering to the market with new management, new offices and new products, the 21st century will bring big business Medisure’s way.