Addressing Scotland’s Healthcare: Challenges, changes, and what is next?

Healthcare is a hot topic. It is not only high on the political agenda, but employers are taking on a greater role in supporting their workforce. The reasons are evident. 

An estimated 200,000 Scots were out of work between June 2022 and June 2023 due to sickness, at an estimated cost of £870 millionⁱ . Long hospital waiting times, declining mental health, an ageing population, and more chronic illnesses is leading employees to turn to their employers for support.

Our report, ‘Employee Benefits and Wellbeing in Scotland’ reveals key trends and challenges Scottish businesses face today and steps they can take to improve employee health and wellbeing benefits.

The changing face of healthcare in Scotland

The private healthcare market in Scotland has transformed over the past five years. Pre Covid, the market was shrinking, with minimal growth in the employer-paid segment, as uptake of private medical insurance (PMI) remained relatively low. However, the pandemic triggered a shift in demand and availability. 

Post-Covid, many employers broadened their eligibility criteria for PMI, expanding access to private healthcare. Howden's research shows one in five small and medium-sized employers now offer private medical insurance to their workforce.

This is significant, as PMI was traditionally a benefit primarily offered by larger firms. This trend is driven by the ongoing challenges faced by the NHS and the rising costs of medical care. Both issues have prompted employers to seek alternative healthcare solutions for their employees, making PMI a more attractive and necessary benefit.

Key challenges for employers 

There is a growing need for businesses to take a proactive role in employee health. Many employees struggle to secure GP appointments, pushing businesses to adopt private healthcare and wellbeing initiatives to reduce absenteeism and boost productivity.

However, despite the increasing adoption of healthcare benefits, Howden’s research found that only nine per cent of employers believe their current benefits are effective. This low satisfaction indicates there’s a long way to go for employers when designing and delivering their healthcare support.

Employees often struggle to access and fully understand the benefits available to them and therefore employers need to communicate their benefits offerings more clearly to ensure employees are aware of how to use them. Another challenge is around data and companies understanding the precise needs of their employees so they can tailor health and wellbeing benefits. This is one of the most critical areas to get right. Benefit decisions based on evidence and data make a fundamental difference to how businesses develop and manage their employee health and wellbeing strategies.

Finally, market complexity can be an issue. The healthcare market is saturated with new products and services, making it difficult for employers to decide which benefits will offer the most value and return on investment.

The future of healthcare

The claims made under private medical insurance (PMI) packages are changing. Mental health claims, diagnostic services, and even online GP and counselling services are on the rise, services people used to rely on the NHS for but are now accessing through their PMI policies.

The ongoing difficulties accessing NHS services and people seeking faster and more personalised healthcare options will result in growing demand for tailored healthcare solutions. Digital services like online GP consultations and mental health support are all gaining in popularity. 

However, this shift has also created new challenges with referral pathways to secondary care, which many insurers are still struggling to navigate well.

Practical steps for employers

How can businesses stay ahead of the curve and meet future healthcare challenges? 

The first step is for them to review existing benefits and also how those benefits are designed. Are the existing benefits valued, or are there gaps and are there new innovative solutions that could be introduced? Prioritising initiatives such as virtual GPs or health cash plan schemes can also offer cost-effective solutions for addressing employees’ healthcare needs without breaking the bank. 

Secondly, employers need to streamline benefits to eliminate duplication and identify gaps. 

Thirdly, they need to engage with their employees to understand their healthcare priorities and ensure employees fully understand the benefits available to them and use them. Effective communication is key. 

Lastly, staying informed about emerging trends in healthcare will ensure employers to remain competitive and benefits meet the workforce needs. This will also help attract and retain talent and ensure employees stay healthy, happy and productive. 

Howden has a dedicated employee benefits team in Scotland and can help employers in Scotland design bespoke health and wellbeing strategies aligned to meet the needs of their individual business, employees, and budget. For more information and to download a copy of the research click here.

i Long-term sickness plagues Scotland | Law Society of Scotland (lawscot.org.uk)