This is the third in a series of roundtables sponsored by CommInsure, organised in conjunction with Conexus and Industry Funds Forum (IFF), in which members of the superannuation and insurance industries explore how they might make a tangible difference in reducing the incidence of psychiatric disorders. According to the mental health professionals, research and early intervention is critical. Super funds discuss the success of their workplace programs in reducing the number of suicide claims, and how they juggle their obligations to the sole purpose test. There is also discussion on how the industry might mobilise its lobbying power, to get government attention to initiatives like Professor Stan Catts’ Australian Psychosis Research Network.
Participants at the roundtable were:
• Professor Stan Catts, professor of community psychiatry, School of Medicine at the University of Queensland
• Helen Hewett, executive director, Industry Funds Forum
• Michael Back, head of wholesale risk, CommInsure
• Donald Patrick McDonald, life governor, Schizophrenia Research Institute
• Graham Long, pastor, Wayside Chapel in Sydney’s King’s Cross
• Kimon Kouryialas, head of distribution, Legg Mason Asset Management
• Greg Staunton, director, group risk, IFS Insurance Broking
• Frank Crapis, executive wholesale product manager, CommInsure
• Peter Rowe, general manager, business operations, Vision Super
• Michael O’Sullivan, chairman, Care Super
• Alix Sachinidis, director, AMWU vehicle division, and MTAA Super
• Carol McKelson-Timmins, manager of operations, Health Super • Greg Bright, publisher, Conexus Financial
• Stephen Shore, journalist, Conexus Financial
Stan Catts: The first problem we have is that 20 per cent of young people experience a mental health problem; usually as some type of anxiety or depression. Half of those go on to become chronically disabled for a lifetime, and a further third will develop a psychotic disorder, such as schizophrenia or bi-polar.
Research is targeted on the psychotic disorders because they’re the extreme end of it, but they’re part of a spectrum of disorders that have a lot of overlap with each other. The next problem is that the public mental health services are in crisis.
There’s an ever-increasing demand and not enough cures to process it. Psychiatry is 20 years behind the rest of medicine in terms of science. Research and services in particular for psychotic disorders are really a shamefully neglected area.
So what can be done? Investment in services without research is a waste. It’s just throwing money at a problem rather than a solution. We need to act in relation to research. But simply doing more research is not enough to defeat such complex conditions. And in the early 2000s, leading Australian scientists and clinicians in the field decided to meet and pool their best ideas to see how it could be fast tracked. How the whole process could be almost leapfrogged into the 21st century. The proposal they came up with was the Australian Psychosis Research Network. It represents a world’s first; a national, translational research initiative for schizophrenia and bi-polar disorders.
APRN will stimulate measurement and implementation of best practice and service delivery, and establish centres of clinical research excellence in each state and territory. This is an important preparatory course. We could improve outcomes by a whole 100 per cent if we deliver best practice consistently. Also there are a lot of off label treatment that could be brought on line to vastly improve the outcomes for people right now, if a bit more research was done to get them approved.
It’s expensive because this would be doubling at least the amount of funding going into this area, if the government actually did give [the requested] $68 million over five years. But in terms of the disease and its cost, it’s trivial really and it just makes no sense not to make this investment when say in 2006 the Commonwealth boosted funding by $1.9 billion over all the millions already going into it.
Sadly there was not one dollar of that $1.9 billion directed to research, not even to evaluate the effectiveness of that $1.9 billion spent. The research neglect is just ridiculous in this field. Surely any other industry would expect an evaluation for spending $1.9 billion. But there’s a big separation in government between research and service delivery. The other thing is, the approach to solving psychotic disorders is actually to try and get in when young people are just showing signs of difficult to treat depression and anxiety.
Intervening at that level, you’ll head off a whole lot of depression subsequently. It will head off and prevent disorder that will have an affect on the workplace.
Greg Bright: Don, you said last time that you kind of put all your hope in the science delivering an answer at some stage. Would you say the funding we’ve seen to date is conservative?
Don McDonald: Considerably. As a result of our son being diagnosed I got involved and I was able to, with the support of the employer associations in New South Wales together with the peak union organisations, put the screws on the State Minister for Health who engaged me full time to try to put this new institute, the Schizophrenia Research Institute, on the map.
As part of that project, that lasted three years, I took this issue out into the workplace like it had never been taken before. When I delivered these presentations I would find that there was silence. And then once you raised the issue, people started to come out of the woodwork from all directions, and talk about their son or their daughter, their wife, their husband, their brother, their sister. And many of these people were suffering some form of illness themselves, as a result of the trauma their family was going through.
Michael Back: What’s actually happening to people who can’t get treatment?
Don McDonald: They’re in the jails. They’re going to boarding houses. They’re in the parks, in the railway stations. They haven’t been de-institutionalised; the institutions have just been changed. Instead of having a hospital where you’ve got professional treatment, they’re now in the jails.
Current government services are only treating about 13 per cent of them. And with unlimited government funding based on limited supply of beds, doctors and nurses and so on, the best they could do would be to alleviate the aggregate disability by about 22 per cent. But the key point is that 78 per cent of the disability caused by the illness can only be treated by science. Can only be treated by research. And there has been no qualitative change in the type of psychotic treatments available since about the 1950s.
People don’t understand…they have no idea that we’ve got a crisis among our youth. Schizophrenia is sweeping through our youth like a silent bush fire, and people are just not aware of it, or they don’t want to know. And these people, if we don’t address this problem, these people are going to be a tremendous burden on the community for the rest of their lives.
Greg Bright: One fund in particular that has gone out, beyond the Superfriend program, into its workplace over a long period and measured the results is MTAA. Alex can you tell us a bit about that?
Alex Sachinidis: Sure. Well I think the important thing about MTAA Super was that we took a decision to do something about some of the statistics we have gathered in terms of people committing suicide, and other associated illnesses which led to a lot of the members taking insurance to cover periods outside of the workforce. But mainly it was that our suicide rates were considered to be disproportionately high compared with the general community.
Greg Bright: So more than 10 per cent of death claims were suicide?
Alix Sachinidis: It was something in the order of 27 per cent. We decided as a fund that it was remiss of us not to do something. We collaborated with several organisations that raised the awareness within the workplace about signs that employees and employers might notice in their colleagues, and how they could offer them some assistance. It’s as simple as that, but I think it went down very well.
Within a two year period, there has been a significant reduction in the number of suicides. I’m not saying that’s attributed solely to the campaign, but I do believe it has had an impact. Even if it assists one person in seeking treatment early, I think that’s the other important point that Stan made. In terms of our members not only is it their life but it’s their working life which is an important thing. That’s where the cost comes back to the community and society generally.
Greg Bright: Greg Staunton – not being crass about it, but suicides cost a lot of money, particularly when they’re young. Do you get a sense of what a suicide reduction in a fund would actually save?
Greg Staunton: It’s not uncommon that suicides rates sit between 10 per cent and 25 per cent of claims across the funds. 85 to 95 per cent of premiums may go back in claim payments. Obviously if you can reduce 25 per cent down to 10 per cent or 20 per cent or something like that, it’s got to have a material cost saving.
For people to have confidence in [an initiative] it’s going to have to be something that’s demonstrated as ongoing and not just something one off. And that generally takes a while to flow through in claims. Often there’s a lag in claims being notified and with sudden death the lag seems to be much quicker, but it could still take two to three years before you get all the death claims through, just through notification because people don’t always know those benefits are there. And then they find their way through the system eventually.
I can’t put percentages or dollars around it but obviously it would be significant. Cbus and MTAA have done some work in the group training area and both funds have identified initially there does seem to be a reduction in numbers coming through in those claims.
Peter Rowe: It’s not only the focus on suicide, but for us, and I’ve looked at this over the last three years, mental illness is probably number two or number three in most years for the cause of disability. Now it’s not always schizophrenia or bi-polar but to me that’s still a very high number. Our suicide rate is probably a lot lower, but our TPD claims rate is still fairly high.
Carol McKelson-Timmins: Income protection is an issue at Health Super. As a fund for carers, about 80 per cent of our member base are women in the hospitals, either nursing staff or cleaners. I had a look at our income protection claims and 40 per cent of those claims that we’ve had have gone full term, which is two years for us, 40 per cent are mental health cases.
Don McDonald: Superfriend and Read the Signs are unbelievable initiatives. It’s fantastic. But the point that I’m trying to make is, having experienced the system, it would be a tremendous thing if this group were able to join forces with Australian scientists who are trying to push this issue and to approach the government…to say to the government: look, we’re doing our bit; this is what we’re doing. You should do your bit. And you should be getting behind these scientists who are trying to develop more effective treatments, find the means to prevent or cure because to ask these doctors and nurses to grapple with this problem with current treatments is like asking a carpenter to build a house with a blunt saw and hammer. Now it’s as simple as that. I’ve got a great deal of respect for the scientists, but they quite frankly don’t know how to push this.
Helen Hewett: I think the initiative that the industry funds are doing collectively are fantastic initiatives. But we’re only a very small part of the community. We are there as trustees to grow retirement benefits for people, but we’re also there to make sure they get to enjoy those times by being mentally healthy – and by being alive.
One of the IFF Mental Health Foundation’s objectives is to do what we can to join the other voices to make sure mental health gets on to the agenda. We can’t ask our insurers to solve the problems of mental health in the community. We can’t expect the funds to solve those problems. It’s just beyond any group, I think. But it’s not beyond us if we get together with other organisations across the mental health sector.
When I went to some of these forums with some of the mental health groups these people are so committed to what they’re doing and they are so starved of funds that they’re almost attacking or sniping at one another sometimes. And that was a real problem when we first started doing some work because a lot of funds said, no no, I’m not going up there. I’ve tried it and it was just a disaster because one trustee liked Beyond Blue, one liked Life Line…so I’m not going to do anything. We’re just going to stick our heads in the sand and do nothing. Those organisations are now working much more effectively together, certainly with us anyway.
Greg Bright: What about lobbying the government?
Helen Hewett: Well I think we can do that, we’ve got the ear of the industry. I think we can do good things, the industry funds, but I think we can all do great things together, working with the scientists. I think we can use our voice with all the ministers, not just in the health sector, but with state and federal governments, so the money is much better directed.
When you can have a scientist in New York or in Perth and one in Sydney, both working on the same thing and they don’t even know it, it’s obvious the money isn’t being used as it could be. It just seems to me that a bit of infrastructure is required, and that could be provided by the wider finance industry.
Greg Bright: The Legg Mason Master Fund is actually an interesting one. It was the very first fund that had investment choice outside its own managers. It has a panel of insurers and they’ve had differences between those insurers in terms of their assessment of their treatment of suicide claims. Kimon, can you tell us why you’ve got a panel and how you differ from the typical industry fund in this way?
Kimon Kouryialas: Our outsourced model is trying to achieve the concept of best of breed. We believe we should have the ability to run a panel that allows ourselves and our members to access a particular organisation. And that’s why we have a panel of four insurers. The interesting thing over the last three to four months is that suicide is becoming an issue for us and what we’ve found is there really is no set guideline in terms of the insurers as to their policy on suicide.
To give you an example, we have one insurer that actually has no exclusions on suicide, whereas another insurer has an exclusion for any intentional self-inflicted injury.
Greg Bright: Michael, what sort of saving would there be if you had an insurance policy which just completely excluded self-inflicted harm?
Michael Back: Just to give an example, I knew of a particular industry fund where the suicide rate in all death claims was 50 per cent. That’s fairly serious. So we actually engaged Lifeline at that time to get some sort of momentum. We were talking about hotlines and talking about calling cards and all those sorts of things, just to get an awareness program happening.
It was going to cost the insurer $5000. It was going to cost the fund $5000. And the insurer said I’m not spending the money. So that fell over. That’s going back to probably 1998. But I think the whole purpose is, if we can actually project and look at and record statistics and reduce our suicides, that’s hitting your bottom line. That’s why this program is so important – we can actually reach out to the members.
Greg Bright: Greg Staunton, funds are in a tight environment, returns matter, and costs are being cut. Can insurance and its communication to members remain a priority?
Greg Staunton: The trustees do have a problem of where does their priority lie for retirement funding and how does insurance fit within that. And as Michael said, just on one claim, it’s not just that person. The family could finish up being disabled – someone else is out of work because they’re worried about someone else. So it has a cascading impact on incomes and it flows through to different members’ accounts over and beyond just the individual.
We know lost work days is huge as a result of those things. I guess it comes back to what is the trustees’ role and those trustees have to format where insurance sits within their spectrum. Obviously death and disability is ceasing that capacity to fund that retirement. But that’s a minority of the group, and should the majority subsidise that? That’s a balance that’s got to be struck.
Helen Hewett: I think there’s a great opportunity here at the moment for funds to be able to distinguish themselves through other added value for members. So no one would be too thrilled about having front page stories about minus or near minus returns.
I think it’s actually a good opportunity to look at some of these other things and I think research shows that members find it very hard to compare the terms because they don’t tend to compare over a long period of time. They find it impossible to compare fees. But they do find it much easier to make a decision based on “I’ve got good service where I am and everything’s going okay”, or “I’ve got lousy service”.
So I think there’s good opportunities through the work that funds are doing now to improve the bottom line when it comes to the cost of insurance and make a really good contribution to doing good things for members by making people more aware of mental illness and educating people.
The other thing is getting back to this whole issue about the Australian Pyschosis Research Network. We can come up with some money and decide to fund some critical element of delivery of this. Obviously we’re talking about big money for an ongoing thing and I think government’s got a responsibility. But I think we could do something ourselves. We’ve got good voices. We’re respected in our own community. The funds, the fund managers, the employers, the journalists. We’ve got a very good group and we work together well. If we did nothing else, we could certainly lend our voice to a really good project.
Peter Rowe: To add to that, I think every fund around the table here is going to see their claims experience going up. As the economy stops booming, we know claims go up. Some people with mental disabilities now, because of the economy, have been able to secure work, but they’re going to be the first to go when things get tough. So don’t fool yourself and think it’s just going to continue on as we are or get better. It’s actually going to get worse before it gets better. So whatever we put in now to prevent this or help ourselves for the long term is going to be of benefit to the funds and to the members.
Greg Bright: Michael O’Sullivan, you’re the only trustee here; can you take that helicopter view of the role of the super fund in these sorts of issues? Everyone’s right, this year the returns are going to look bad and there will be particularly large account balances thinking about forming their own DIY fund.
Michael O’Sullivan: We’ve done a lot of member research, basically employers and employees every second year, fairly deep including focus groups and so on. Generally speaking the members are very positive about the idea that their fund should in some way or other make a socially beneficial contribution.
The years that we’ve done it have all been very good years. So it may be that they’ll be a fraction less generous when they get this year’s annual report. I think it’s possible to lead people to think more generously about their own donations to good causes than they might do mutually, and I think the industry funds have got a good track record of acting mutually which helps because it has a multiplier effect.
I think we have an opportunity with a new government, and as far as we’re concerned we have a better relationship with this government that we had with the previous government. I don’t think that’s overstating it. We didn’t have a relationship with the Howard government. So I think we can be a useful component of some lobbying to get this APRN project established and run. We need to know a bit more detail, beyond accepting in good faith that it’s a terrific idea.
Alix Sachinidis: Going forward you would think there would need to be developed a funding model that would underpin the research because one of the issues for the super funds would be the sole purpose test in respect of using existing members’ funds to try and take the APRN forward. I’m a director on the AIST as well so I think that’s a good forum to get super funds as a group to understand better and to look at initiatives to underpin this project.
Helen Hewett: The only problem I’ve got about that is that the funds aren’t going to financially support this. Some funds might but as a group they won’t. Because they’ve already set up a foundation to do work, which they’re supporting. The biggest thing we can do is get behind and lobby and support the project, which costs everybody nothing. I think that’s a terrific idea about getting someone to look at how it might be treated as a socially constructive project in terms of a funding model and a business case. And then look at whether any of the socially constructive funds that are around might be interested in it.
Michael O’Sullivan: Out of their administrative expenses they could release a little bit, but it would be tens of thousands not millions. The biggest push they can make is to lobby and to use their distribution system.
The more ambitious thing to do…I’ve just been thinking about it, but I’ll just say it out loud in case…Is that super funds could jointly launch a program of inviting the members to opt into, for example, just giving one or two basis points of their annual earnings into such a thing. Over time that would amount to a lot of money, but it wouldn’t mean anything to the individuals. If you were going to get a return of 7.61 per cent then give up the .01 per cent. It wouldn’t really worry anybody much at all. It wouldn’t make much difference to anybody’s life. But pooling it all would make a difference.
Anyway it would take a long time to build such a program. You couldn’t get it this financial year or next financial year. But you could start.