An international approach to getting people back to work
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The reform of long term sickness absence. an international approach to getting people back to work. Welfare to Work Convention 2011, Manchester, 1 July 2011 Hans Ouwehand, Director Calder Holding. The Netherlands pre 1990. Passive system: Generous benefits /no incentives for employers

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The reform of long term sickness absence

an international approach to getting people back to work

Welfare to Work Convention 2011,

Manchester, 1 July 2011

Hans Ouwehand, Director Calder Holding


The Netherlands pre 1990

  • Passive system: Generous benefits /no incentives for employers

  • Prediction that disability benefits recipients would rise to 1 million, out of a population of 16 million.

    Prime Minister Lubbers 1990: “the Netherlands are ill”

  • Employers and unions (ab)used disability legislation to enable restructures

  • In times of high unemployment, people with disabilities but capable of work given full disability benefits. Unemployment risk in disability regime.


From Hammock...


...to trampoline


Reconstruction of disability legislation

  • 1994 TZ/Arbo: Employers and employees responsible for health and safety policies.

  • 1996 Wublz: Employer assumes risk – 1 year sick pay at full salary

  • 1998 Pemba: Differentiation of insurance premiums based on risk

  • 2002 Gatekeeper legislation: Flow chart

  • 2003 VLZ: Employer responsibility extended to 2 years

  • 2004 Herbo: Re-assesssment of 450,000 disability benefit recipients

  • 2006 WIA: New legislation for disability


Gatekeeper process


Changes

  • Big incentive for employers

  • Private Insurance companies get involved

  • Creation of private Occupational Health and Welfare to Work market

  • Occupational Health specialists and GPs brought together to agree shared standards

  • Moreover:mind shift in society


Results – Disability Benefits


Forecasts

Unchanged policy

IWA

Disability benefits costs € ,000

Year


Results

  • 2010: WAO/WIA 580,000 instead of predicted 800,000 or the dreaded 1 million

  • 2009: 65% of partialy able are sustainable at work

    • Gatekeeper law: on-flow fell from 100,000 to 58,000 in the years 2002-2004 (53,000 new claims and 5,000 re-opened cases) (-42%).

    • Extending occupational sick pay from one to two years: 25-35% reduction, i.e. 13,000 fewer claimants.

    • Stricter disability assessments: 12% reduction, i.e. 5,000 fewer claimants.

    • Together, these reforms saw a 61% reduction in benefits payments

    • The WIA itself led to 7,000 less benefits

      Surgery Succeeded,

      or did a few patients die along the way???


Down side

  • Complex system with many exceptions and fragmented interventions.

  • Increase of Young Disabled and disabled without an employer.

  • Those who are incapacitated by less than 35% ineligible for disability benefits - disability risk transfered to unemployment regime (reverse of the 80’s, same as in Germany).

  • Too much emphasis on retaining your current job. Decrease of mobility. “Employer and employee are condemned to each other.”


Solution

Not another reconstruction but

recognition of the drawbacks:

  • Attention for young disabled and employees without an employer.

  • More focus on mobility to other employers/sectors.

  • Integrated and early stage approach to back to work interventions.


The journey to ESA

  • 300,000 people claiming sickness-related benefits flow onto ESA each year (50% of total)

    • Majority mental health/musculoskeletal conditions

    • Low-skill/low paid jobs over-represented

    • SMEs over-represented

  • No significant incentive for employer

    • Minimum liability £81.60 per week x 28 weeks = £2,285

  • SMEs don’t know how to support workers back to work – and are worried about privacy and being seen to be harassing workers


The journey to ESA

  • Attention for young disabled and employees without an employer.

  • More focus on mobility to other employers/sectors.

  • Integrated and early stage approach to back to work interventions.


Learning lessons


Different starting points

  • Netherlands: generous, insurance–based system, linked to individual incomes

    • Insurers play an influential role, politically and socially.

  • UK: universal entitlement, limited protection

    • Limited contributions–based support via National Insurance

    • Few employees covered by voluntary income insurance


Key elements for success

  • More incentives for employers, employees and insurance companies helps

  • Employers must play a role in employee lifestyle and health

  • Bring together all organisations that stand to lose from sickness/disability absence – e.g., defined benefit pension schemes/NHS/health insurers

  • Culture shift needed – employers, individuals, medical practitioners, government.


Hypothesis 1

The UK and The Netherlands have a different socio-economic context. Being effective and successful in battling long term sickness absence in the UK presupposes a different set of incentives for employers and employees.


Hypothesis 2

Getting other stakeholders than employers on board is key to success.


Hypothesis 3

At the end of the day, the focus has shifted from curative to preventive action. A mindshift needs to be brought about with employers and employees, i.e. society.


Hypothesis 4

What the UK needs is not so much ‘Welfare to Work’ as

‘Welfare through Work’.

Nothing keeps a person healthier and happier than work.


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