an international approach to getting people back to work

1. 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

3. 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.

4. From Hammock...

5. ...to trampoline

6. 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

7. Gatekeeper process

8. 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

9. Results – Disability Benefits

10. Forecasts Unchanged policy IWA Disability benefits costs € ,000 Year

11. 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???

12. 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.”

13. 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.

14. 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

15. 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.

16. Learning lessons

17. 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

18. 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.

19. 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.

20. Hypothesis 2 Getting other stakeholders than employers on board is key to success.

21. 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.

22. 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.