This report covers the UK occupational health market. Occupational health is defined as healthcare provision provided in the workplace and includes both specific health and safety care and broader issues of health, fitness and preventative health care, often referred to under the heading of wellness. It remains the case, however, that a feature of the sector is the lack of a clear definition and understanding of what constitutes occupational health. Effectively, occupational health comprises health services to employees that are paid for by the employer.

There remains much debate and confusion over the precise definition of what constitutes occupational healthcare and the boundaries of the sector remain vague. According to the joint International Labour Organisation/World Health Organisation Committee on Occupational Health, occupational healthcare is aimed at the following:

“The promotion and maintenance of the highest degree of physical, mental and social wellbeing of workers in all occupations; the prevention amongst workers of departures from health caused by their working conditions; the protection of workers in their employment from risks resulting from factors adverse to health; and the placing and maintenance of the worker in an occupational environment adapted to his/her physiological and psychological capabilities.”

The Health and Safety Executive (HSE) suggests “The term 'occupational health' conveys different things to different people. For some, it means simply the prevention and treatment of illness that is directly related to work, in which health education has no place. Others will emphasise fitness for work issues separately from health and safety. However, the impact of any sickness absence on SMEs and their employees does not brook such fine distinctions. In those terms, it is of little importance whether the sickness is the result of an accident at work, long term exposure to risk or the conflicting demands of home and work. Only a holistic approach can make a difference to health inequalities.”

The HSE therefore reports that occupational health can embrace:

• the effect of work on health, whether through sudden injury or through long term exposure to agents with latent effects on health, and the prevention of occupational disease through techniques which include health surveillance, ergonomics, and effective human resource management systems

• the effect of health on work, bearing in mind that good occupational health practice should address the fitness of the task for the worker, not the fitness of the worker for the task alone

• rehabilitation and recovery programmes

• helping the disabled to secure and retain work

• managing work related aspects of illness with potentially multi factorial causes (e.g. musculoskeletal disorders, coronary heart disease) and helping workers to make informed choices regarding lifestyle issues

The CIPD defines occupational health as:

“Occupational health is a specialist branch of medicine focussing on health in the workplace. It is concerned with the physical and mental wellbeing of employees. Occupational health specialists can support organisations through advising on workrelated illnesses and accidents, carrying out medicals for new starters and existing employees and monitoring the health of employees.

Occupational health services are also used to assist organisations in managing absence situations – both short and long term. The opinion of an occupational health specialist might be crucial in determining how to manage a capability issue, and the opinion of an occupational health specialist can be key evidence in a claim to an employment tribunal.

Only large organisations are likely to employ their own occupational health specialists. Most organisations will contact an external provider of occupational health services as and when they need it. Some organisations will also employ a full-time nurse who has training in occupational health. This might be supported by a parttime doctor, who comes to the organisation to carry out medicals and other assessments. Other organisations, particularly those working in hazardous areas, are more likely to employ their own doctor.

The level of provision is likely to be determined by the size of the organisation and the nature of the operation. An organisation that operates in a particularly hazardous area is clearly likely to need more occupational health support than other organisations.

The interaction of employees with occupational health will largely depend on the presence of the service. If there is a full-time service on site then employees are more likely to make adhoc use than if it is only available at specified times. It is important that employees are clear about the nature of the service, and see the distinction between what is offered by occupational health and what they should refer to their own GP.”

As well as addressing issues that occur, an occupational health service should be proactive and aim to reduce potential problems in the workplace. Hence the activities of occupational health are likely to include:

• implementing policy

• ensuring compliance with health and safety regulations

• minimising and eliminating hazards

• dealing with cases of drug and alcohol abuse, and advising on HIV/AIDS issues

• offering preemployment health assessment

• maintaining relations with appropriate bodies and individuals

• monitoring the health of employees after an accident, illness and during and after pregnancy

• managing clinic facilities, basic health checks and first aid

• advising on medical severance and illhealth retirement

• advising on ergonomic issues and workplace design

• promoting good health education programmes

• promoting healthy eating

• monitoring symptoms of workrelated stress

• providing advice and counselling

• working with special needs groups.

The occupational health service will be provided by a diverse range of occupational health practitioners, including physicians, hygienists, psychologists, ergonomic experts and occupational health nurses.

Occupational health is likely to work closely with an organisation’s HR team and those responsible for health and safety. However, for occupational health to have the greatest impact it is important that line managers feel able to approach occupational health advisers to discuss any concerns and issues.

Some numbers in tables do not add exactly due to rounding.

The term billion is used to represent one thousand million.

All values are at current prices, except forecasts that are quoted in constant 2012 prices.

MBD publishes a range of reports on the UK healthcare market. The trends in the private healthcare market are analysed in detail in the publication, The UK Private Healthcare Market Development.

Reports are researched and written by MBD’s in-house, specialist business-to-business consultants. Research is based on both an analysis of official information and on original, trade research, providing both a quantitative and qualitative view of the market. MBD’s unique range of frequently updated reports provide an integrated body of on-going research, enabling deep understanding of the prevailing trends and of the drivers of these trends based on trade opinion.

The following abbreviations appear in this report:

According to the latest Labour Force Survey, published in February 2014, an estimated 131 million days were lost in 2013 due to sickness absences in the UK. This signals a slight improvement on the estimate published in the November 2011 government-commissioned review on sickness absences in the UK, which suggested that 140 million days were lost per year. This is equates to 2% of all available working time (based on 7.5 hours working days) or 4.4 days each worker per year.

Table highlights:

• Over the majority of the five-year review period, figures for the number of days lost due to sickness fell year-on-year. The largest decline was seen in 2010, when the number of days lost declined by 9 million (6%).

• Despite an increase in the total number of days lost due to sickness in 2012, both the percentage of working hours lost and the average number of days lost per worker remained the same, at 2.1% and 4.5 days respectively.

Figure 7: Sickness absence among UK employees, 2009-13

(Millions)

Source: MBD analysis of Labour Force Survey data

Levels of sickness absence vary with a number of factors and characteristics. Among them are age, gender, skill and wage level, sector, size of firm, sick pay regimes (payment of occupational sick pay) and the existence of a trade union. Higher sickness absence is generally associated with the factors and characteristics below:

• older workers

• women

• those with a longterm health condition

• the public sector

• larger firms

• public administration and health/social work sectors

• the existence of a trade union

• part-time workers

In March 2008, Dame Carol Black published ‘Working for a healthier tomorrow’ - a review of the health of the working age population. The review highlighted the need for “forward-thinking professional leadership” and that this could only be achieved by expanding the remit of occupational health to include all those of working age, and working with other specialities (both medical and non-medical). The Labour government duly responded to this in November 2008, publishing its own report entitled ‘Improving health and work: changing lives. However, the General Election in 2010 led to a new government being formed, with the coalition launching their own separate report aided by Dame Carol Black and David Frost. ‘Health at work - an independent review of sickness absence’ was published in November 2011 and assessed the system for managing sickness absence and highlighted any market failures or problems of unaligned incentives. It noted that a significant number of absences last longer than they need to and that each year 300,000 people fall out of work onto health-related state benefits.

Since the 2011 Sickness Absence Review, there has not been a comprehensive statistical survey on the incidence of sickness absence among employees by a government body. However, the Chartered Institute of Personnel and Development (CIPD) produces an annual report that includes a survey, using a select number of respondents, on the incidence of sickness absence. The findings are shown below:

Table highlights:

• The highest incidence of sickness absence was up to seven days for all employees and for both manual and non-manual employees at 67%, 60% and 74% respectively.

Key analysis

CIPD’s survey report interestingly revealed that ‘four weeks or longer’ has a higher incidence of sickness absence among employees than ‘eight days to four weeks’. The most likely explanation for this is that the majority of illnesses, like flu or chest infections, last for a few days to just over a week - explaining most employees taking up to seven days off. If symptoms are still bad enough for an employee not to return to work after this time period, then the illness could be more serious and therefore leads to employees taking longer than four weeks absence from work.

The government published its response to the sickness absence review’s recommendations on 17^th January 2013, outlining a strategy to support the health and well-being of the working age population and examined:

• Setting up a health and work assessment and advisory service

• Improving sickness absence and management

• Supporting healthcare professionals

• Reforming the benefits system

The Health, Work and Wellbeing initiative began in 2005 and aimed to improve the general health and well-being of the working age population and to support more people with health conditions to stay in work or enter employment. It is supported by six government partners: Department for Work and Pensions (DWP); Department of Health; Health and Safety Executive (HSE), Scottish Government; Welsh Government; and the Department for Business, Innovation and Skills (BIS). The initiative resulted in a number of measures, with the most recent development being the introduction of a ‘Health and Work Assessment and Advisory Service’(HWAAS), due to start late 2014. This service will be launched to reduce the number of people that claim health-related benefits, measured at more than 2.5 million by the Incapacity Benefit and Employment and Support Allowance in 2013/14 at a cost of £12 billion to the government per year. The government also claims that 90% of people with common health conditions can be helped back to work, so the service will also act to help them do this.

The HWAAS will provide an occupational health assessment and general health and work advice to employees, employers and general practitioners (GPs) to help people with a health condition to stay in or return to work. This service will be funded by the estimated £50 million yearly saving from the axing in April 2014 of the Statutory Sick Pay (SSP) Percentage Threshold Scheme - which allowed some employers to reclaim SSP costs. There are two elements to the service:

• Assessment - Once the employee has reached, or is expected to reach, four weeks of sickness absence they will be referred by their GP for an assessment by an occupational health professional, who will look at all issues preventing the employee from returning to work.

• Advice - Employers, employees and GPs will be able to access advice through a phone line and website.

Following an assessment, employees will receive a return to work plan with recommendations to help them to return to work more quickly and information on how to get appropriate help and advice. The government will also introduce a tax exemption of up to £500 a year for each employee on medical treatments recommended by the HWAAS or an employer-arranged occupational health service. The DWP estimates that the service will help between 230,000 and 457,000 people a year and the government will announce the successful bidder for the contract to operate it in England and Wales in July 2014.

Table highlights:

• The government analysis suggests that a health and work assessment and advisory service will generate annual benefits to employers of between £65 million and £80 million, while the government could benefit by between £105 million and £225 million.

Outside of the government initiative outlined above, occupational health has fallen into a number of sectors:

• large employers that have established their own capabilities for the use of employees such as Shell, and a host of substantial employers developing a market that if it was commercially priced is estimated to be valued at some £200 million, equivalent to more than 30% of the total market

• a number of companies have established capabilities for contracted out services, either specialising in occupational health or diversifying into the sector as an extension to their other health related capabilities (especially those involved in health insurance or related areas, and sometimes extending to facilities management). This is the largest part of the market, estimated at more than 45%.

The remainder of the market has been fulfilled by the NHS or other government services.

The driving force behind the commercial development of the sector has undoubtedly been the public sector market for services. Absenteeism in the public sector has traditionally been relatively high in comparison with the private sector, both in terms of the incidence and length. However, over the last decade, sickness absence rates have declined more strongly in the public sector than in the private sector, so the gap is narrowing.

The public sector spending cuts, which have been announced annually by the coalition government since 2010, have increased the burden on the NHS to maintain its quality of service (despite the NHS being ring-fenced from budget cuts). The costs of providing health resources and facilities to the public are ever-increasing as the population grows and gets older, so alternative ways of reducing demands on the health service are being sought after and considered by the government and NHS alike so funding cutbacks are not as damaging as they could be. The most significant way to do this is through increasing people’s knowledge of and the provision of preventative healthcare through occupational health schemes - which also have the advantage of reducing absenteeism and improving employee morale. As a consequence, some of the burden of providing healthcare has now been shared with the private sector.

This has helped the government to reduce the public sector net cash requirement on the health service by encouraging the private sector to take some of the burden, reducing total demand and lowering supply requirements in the public sector. This has led to health service demand levels being met by added contributions to the private sector, instead of the government having to increase expenditure levels to the service.

The shift in health provision from the public to the private sector has been aided by the willingness of private sector healthcare providers to seek alternative revenue streams by diversifying into other areas. This has enabled the occupational health market to shift from being restricted to large-scale organisations to being actively used by smaller companies. However, investment in OH remains greater in large-scale organisations and sectors where health and safety have long been serious considerations.

The changes in the British economy have also led to a number of perceived inequalities in occupational health. The comparatively high usage of occupational health professionals or health and safety specialists by the public sector means that almost half of the total workforce has access to some form of occupational health advice, even though this may be fairly remote from the workplace according to the HSE. Even allowing for some diminution in public sector occupational health support following contractorisation, the picture is very different in the private sector where the HSE (relying on data from 1998) indicates only 8% of establishments make use of the services of a health professional. This has now substantially changed.

Access to occupational health services has never been universal in private sector employment, but a higher proportion of workers were once covered by employer's 'inhouse' services. The decline of large manufacturing companies and the paternalism sometimes associated with such organisations, contracting out and 'down sizing' have all contributed to a decline in people covered by inhouse services. It is now more usual for companies and large public sector organisations (except the NHS) that use occupational health services to buy them in. Many contractors offer good services but their distribution is uneven, particularly outside major conurbations. Indications are that most smaller companies either do not use occupational health support at all or rely on GPs or nurses, some of whom are not trained in occupational health and therefore may not provide an adequate level of support.