Getting rich on disability denial

Debbie Jolly reports on US insurance giant Unum, whose ‘biopsychosocial model’ is being used to justify the devastating cuts in disability benefits

February 19, 2013 · 4 min read

When the Tory work and pensions undersecretary Lord David Freud set out his vision of welfare reform for disabled people he used a number of references to back up his plans. No fewer than 170 of these references came from a group of academics based at or connected to Cardiff University’s Centre for Psychosocial and Disability Research.

This centre, originally led by the ex‑chief medical officer at the Department for Work and Pensions, Sir Mansel Alyward, was funded by the US-based insurance giant Unum to the tune of £1.6 million from 2004 to 2009. The objective was to add academic credibility to the ‘biopsychosocial model’ that has underpinned disability benefits reform since the early 1990s – a model used as part of the government’s disability benefits crackdown by the private company Atos in identifying who is deemed to be ‘fit for work’ and hence ineligible for disability support.

So what is the biopsychosocial model? In this context, its key postulate is that an emphasis on medical causes and effects has failed to provide an adequate basis for disability benefits policy, and therefore much greater emphasis should be placed on the psychological attitudes and beliefs of individuals. It posits that disability – and the ability to work in particular – is not just a medically definable, physical matter but one that has a social and psychological dimension too. And it is used to underpin the assertion that to a very large extent the growth in the cost of disability benefits must surely be the result of people faking those disabilities.

A whole set of workshops run by Unum with such charming titles as ‘Malingering and illness deception’ should leave us in no doubt about where this approach is coming from. A glance at popular media would appear to substantiate such a view. However, the headline figures of those considered ‘fit for work’ by Atos always miss the successful appeals at tribunal, which significantly reduce those figures (and incidentally cost the taxpayer £50-80 million per year). Who is gaining from this system?

Unum’s second vice-president John LoCascio was brought into UK government circles as early as 1992 to ‘manage’ incapacity benefit claims. He was also responsible for bringing in ‘health assessors’ and training them by Unum criteria in biopsychosocial views of individual capacity. Back in the US this approach led to the company (which currently provides disability insurance for 25 million workers, half the US market) systematically refusing to pay out on huge numbers of insurance claims. One of its working practices that received widespread negative attention involved rewarding employees with ‘hungry vulture awards’ for their success in closing claims.

Unum’s behaviour resulted in it being accused of being ‘an outlaw company – it is a company that for years has operated in an illegal fashion’ by California insurance commissioner John Garamendi in 2005, when it was charged with more than 25 violations of state law and fined $8 million. These charges followed a financial and regulatory settlement in the previous year with 48 US states following investigations of Unum’s alleged abuses.

Nevertheless this same basic approach was to prove useful in helping with the UK’s welfare reform and in overriding the basis of medical opinion as the deciding factor on a whole set of conditions. And the more the government bought into disability denial with its contracted private companies such as Atos and supporting academics, the more Unum stood to benefit from increased market returns on its insurance business as disabled people saw their minimal welfare support diminishing.

The company was quick to seize its opportunities. As early as 1997, with the roll out of the all work test to assess fitness for work for benefit purposes, in which John LoCascio had played a major part, Unum launched an expensive advertising campaign. One ad ran: ‘April 13, unlucky for some. Because tomorrow the new rules on state incapacity benefit announced in the 1993 autumn budget come into effect. Which means that if you fall ill and have to rely on state incapacity benefit, you could be in serious trouble.’

Unlucky for some, lucky for Unum.



Mogg-mentum? Thatcherite die-hard Jacob Rees-Mogg is no man of the people

Adam Peggs says Rees-Mogg is no joke – he is a living embodiment of Britain's repulsive ruling elite

Disarming DSEI

Andrew Smith writes about the campaign against London’s biennial arms fair and ending the worldwide arms trade

The tyrant’s lobbyist

Emma Hughes reveals the interests behind an influential UK lobby, the European Azerbaijan Society


Biocrass

Biofuelwatch gave spoof awards to polluters for the ‘biomess’ they’ve made. Oliver Munnion reports

Damage limitation: shining a light on Bell Pottinger

Kara Moses and Tara Clarke explain why they glued themselves to the front door of one of the UK’s most influential public relations firms

Canary Wharf: the dark tower

This month the sterile steel of Canary Wharf will play host to anti-G8 protests. Daniel Turi of Occupy London gives us the lowdown on the speculators’ skyscrapers