A recent report from market analysts Laing & Buisson appears to suggest that people are starting to question the value of private medical insurance, demand for which has stayed constant for over 30 years.
This latest report highlights how payments from private medical insurers to UK private hospitals fell by 3 per cent in 2010 and 2011, while income from treating NHS patients increased by an average of 6.25 per cent in each of these two years.
Perhaps then now is a good time to remind everyone why there are still valid and practical reasons for investing in private healthcare. Firstly, waiting lists have not gone away. True, they are not at the level of 1999, when more than 1,200,000 people were waiting to get treated, but currently the numbers are around 600,000 with the average patient waiting just under nine weeks for an in-patient admission.
This said, there is no doubt that the NHS has improved greatly in the last 15 years. The main reason for this can be attributed to vast increases in funding, to the tune of 10 per cent
real increases every year. Unfortunately, such days came to an end in 2010 when the Government spending review projected less than 1 per cent real annual growth going forward, and asked for £20 billion in efficiency savings by 2015.
In the past, health authorities would have dealt with this need for economy by increasing waiting times. This has not been so easy, however, since the introduction of the “any willing provider” principle. This reduced the authorities’ ability to control the supply side, by opening the door to the private sector. Nevertheless, this has not stopped some from trying. Last year, following a complaint from a local independent hospital, the Secretary of State had to intervene to tell the South West Strategic Health Authority that it could not simply impose minimum waiting times.
The more subtle approach has been to tighten up on the criteria for referral. GP Magazine, the trade publication magazine for GPs, recently reported that 91 per cent of Primary Care Trust were telling GPs to delay referral for a range of treatments, particularly orthopaedic surgery, until the condition had deteriorated to the minimum threshold set by the National Institute for Clinical Excellence (NICE). NICE itself may therefore become part of the economic drive, through its duty to evaluate new drugs and procedures. While its decision making should be above political influence, it will be a hard path to follow.
Flat funding will make it difficult, if not impossible, for the NHS to keep up with medical technology. Take, for instance, the recent case of the breast cancer drug, Avastin. The drug has been in use worldwide since 2004 and costs around £20,000 per course of treatment. NICE took until 2010 to decide that survival rates were not good enough to make the drug good value for money. The strategic health authority for London, NHS London, thought otherwise, however, and decided that it would fund the drug.
This “postcode lottery” is likely to increase under the restructured NHS where strategic health authorities will be replaced by more than 200 primary care commissioning groups and NHS hospitals will be free of central control. A recent report from an organisation representing patients with musculoskeletal conditions – the group of conditions that figures highest under private insurance claims – found that Peterborough PCT was spending only £275 per patient per year on these conditions, compared to £764 in the best performing PCT.
It is hard not to believe that this situation may be related to the fact that Peterborough Foundation Hospital Trust is one of the worst performing in the country, with losses of £50million a year. Was the PCT trying to help its local hospital by giving it less patients to deal with, or hindering it, by denying it business? Either way, the message here is that patients in some parts of the country are likely to do better than those elsewhere.
In summary, therefore, access to NHS treatment is likely to suffer as a result of curtailments in funding. Waiting times will probably not increase very much, but patients without medical insurance may well find that they are not able to get onto the list in the first place.
Five years ago, the NHS was performing well enough to make the cost of medical insurance difficult to justify. Nevertheless, numbers covered by corporate medical plans continued to expand. Now private cover has gone back to being a necessity rather than a luxury.