FirstCare buys Active Health Partners

There has been some consolidation in the Absence Management Provider market with FirstCare taking over Active Health Partners(AHP). This will give FirstCare critical mass and economies of scale that should make their pricing more attractive to potential clients.

Having met the leadership team at AHP when they first hit the market several years ago, I always thought it was going to be difficult for them to recover their significant investment in the timescales they needed to. But is outsourcing absence management a price sensitive issue or really one of organisational culture?

For absence management companies to be successful, I believe that they need their potential clients to be already relatively sophisticated on how they manage and tackle absence. Before being able to make a cost based decsion on outsourcing, they need to understand:

The current levels of absence
The cost of the current levels of absence
The impact on performance due to absence
The cost of managing absence throughout the business
The potential for reducing those costs both in-house and outsourced
The costs of investment to achieve that potential
The anticipated return on that investment

Does your organisation have this level of detail on absence? Recent surveys suggest many do not and whilst some will make an intuitive decision based on a loose grasp of the figures, I think many just put it off for another day.

Those who have worked through their own figures and come to the conclusion that it is cost effective to outsource then have to consider the cultural impact this will have on the relationships between employees and their line manager. At a time when many commentators are calling for greater line manager involvement in the health and wellbeing of their reports, what will the impact be of taking out absence notification? What if any are the cultural issues of doing so?

If you look at the client base of many absence management providers, the great majority come from the public sector where higher levels of absence and lower levels of employee engagement are well recognised. For it to make economic sense, their clients also tend to have a large workforce. This suggests to me that cultural issues as well as cost of service do play a part in outsourcing decisions.

To overcome price and cultural barriers to engaging them, it would seem that FirstCare are developing their proposition beyond just initial notification and data collection. They now offer fast track physiotherapy along with pre-employment medical and background screening. They are building much more of an occupational health capability.

Being in control of the first notification of an absence, puts them in a very strong position to help clients on a much wider scale. Case management co-ordination, early diagnosis, early intervention, there are numerous possibilities if they get the model right. I’ll be watching their progress with great interest.