Business Travel News - June 16, 2008 - (Page 10)

BTN RESEARCH Buyers Scrutinize Medical Assistance Service Use, Contracts BY SETH HARRIS Corporate purchasing departments and other stakeholders, including travel buyers, are giving agreements with emergency medical assistance providers more scrutiny to ensure the right fee model and necessary services and eliminate overlap of existing contracts with insurance, medical and security providers. In what can be an expensive supplier category with only a handful of global players that often share third-party resources like air ambulances, doctors and clinics, procurement’s rigor in the request-for-proposals process is “keeping them honest,” said IJet Intelligent Risk Systems president Bruce McIndoe. Consolidation could further impact pricing within the niche category as medical assistance providers aim to become more global and provide more robust risk management services by joining with travel security providers. Last month, medical assistance company Medex Global Group completed the acquisition of its 10-year travel security partner ASI Group, which now operates as a Medex subsidiary. Earlier this year, International SOS began a joint venture with Control Risks Group, creating a similar entity (BTNonline, March 17). “We don’t really see price pressure because of consolidation at this stage,” said Europ Assistance USA president and CEO Guillaume Deybach. “What we could see in the coming year with the slowing economy is pressure on price because procurement people are just trying to save money wherever they can.” Emergency medical assistance contracts can include a variety of fee models and terms. For example, Europ Assistance USA offers access coverage, in which a corporation pays per use of service and for additional expenses incurred during an incident; a service fee model for the number of employees covered plus incurred expenses; and an insured program, according to Deybach. According to McIndoe, for an av- erage Corporate Travel 100 organization, a medical assistance accessbased program’s initial coverage could range from $30,000 to $50,000 and anywhere from $20,000 to $100,000 per evacuation, and insured programs can range far into the six figures. Rigor into emergency medical assistance contracts has found a lot of double payment, as some corporations already are covered through corporate insurance, employee medical insurance or executive coverage programs, said McIndoe. Deybach has noticed procurement’s influence in contracts through more stringent service-level agreements that measure such qualitative metrics as response time, service availability and the time it takes for claims payments. “When we see the procurement people being involved, it’s usually to see more structure in terms of compliance issues and service level agreements,” he said. Despite the role procurement is taking in contract evaluations, some negotiations for security and medical services still are highly complex and far from being seen as a com- multiple suppliers to handle its risk management services, but has a risk management committee that coordinates sourcing efforts, evaluates contracts and provides an assessment for the corporation. The San Jose, Calif.-based company has its have prepared themselves for emergencies, many never use the services. According to a Business Travel News survey, 57 percent of 176 respondents said less than 1 percent of their company’s travelers required medical or other emergency assis- MORE THAN HALF HAVE SECURED EMERGENCY MEDICAL SERVICE CONTRACTS We are using one or more providers domestically We are using one or more providers multinationally We are in the process of selecting a provider We are likely to replace our provider in the next year or so We will select a provider by the end of 2009 We will select a provider, but after 2009 We do not have a provider and have no plans to use one 12% 39% 3% 1% 6% 1% 39% Source: A BTN survey of 179 corporate travel buyers travel and security departments handle risk management, while security handles the underwriters for executive extraction and human resources manages the general medical benefits abroad under the insurance contract. The committee consists of a representative from fa- Travel Management’s Role In Emergency Medical Service Contracts Limited Yes, travel management has a role in contract management 30% 70% No role Note: Of those respondents from companies with such contracts Source: A BTN survey of 179 corporate travel buyers modity. Before SLAs and key performance indicators are used, companies need to develop an internal “risk management framework” across several disciplines, said Torsten Kriedt, Advito vice president of innovation and intelligence. Cadence Design Systems uses Business Travel News cilities and procurement, legal, safety and security, travel, and treasury, which covers the insurance programs. Cadence has eliminated most of its service overlaps, according to director of global travel Marcia Saurman. Although Cadence and other firms tance in the past 12 months. International SOS executive vice president Tim Daniel said that corporations use travel assistance for emergencies, ranging from lost passports to medical evacuations, fewer than 10 times per thousand days of travel, on average. With average low usage rates and high prices for some emergency medical programs, corporations do a fair amount of bean counting in deciding to hedge against a potential disaster or emergency and then mixing that risk assessment with the historical need, travel patterns and budget. “To a certain extent, what drives those decisions is the actual risk assessment that each corporation would do to determine their level of risk as far as where they are traveling,” Saurman said. “It’s working for us because we don’t do a lot of highrisk destinations. We’ve had extremely low extractions in eight years. For us, it makes financial sense to have it a little fragmented and have the rider for our executives, and the general traveler population covered under our normal insurance benefits.” ■ sharris@btnonline.com ■ 10 Monday, June 16, 2008 www.BTNonline.com http://www.BTNonline.com

Table of Contents for the Digital Edition of Business Travel News - June 16, 2008

Business Travel News - June 16, 2008
Contents
Inside Track: Citi, TMCs Test Traveler-Tracking Tech
Profile: South African Firm Mines Travel Savings
BTN Research: Emergency Medical Assistance
Forum: Delta, Northwest Deal Doesn't Add Up
Aviation: Dale Moss Pilots OpenSkies' Launch
Lodging: NY Legislation Worries Corp. Housers
Ground Transportation: Amtrack Eyes Discounts
Meetings Today: Decentralized Co. Interacts
Executive Dashboard: Air, Hotel Demand Slipping

Business Travel News - June 16, 2008