The future of private health insurance and the NHS

It is amazing that as we approach an election, all three political parties suddenly have new cures for the problems of the NHS.

For years, the political mantra has been on how much more they will spend than their opponents; how they will cut waiting lists, add new services and more.

Now there is a universal U-turn. They all now claim how much more they will save by cuts. These range from cutting one in ten jobs to £1.5 billion in cuts. No that is not a misprint, I mean billion.

Now we all know that with a population 10 million higher than a decade ago, many older people, huge scientific advances, costly new medicines and more emphasis on prevention, that over the next decade the physical and financial demands of the NHS will rise every year.

Estimates vary, but insiders suggest that to cover all the above, in addition to any increase for inflation, the NHS budget will have to go up around 10% every year.

Our wonderful politicians are now suggesting ways of saving money. To be fair, cutting out some management that does nothing else but compile statistics or check what other mangers do, and paying drug companies a lot less, and selling off surplus buildings make sense.

We have been down this road before. In reality there is a limited amount that service improvement can do, and outsourcing services to private contractors tends to end in disaster. If you study the last recession and history, what tends to happen is that the staff that get reduced are doctors, nurses and midwives; the number of managers seems always to go up.

Perhaps it will be different this time, but to be perfectly honest, having mortgaged our future to save the banks, whatever political party comes into power in 2010 will inevitably have to spend less on the NHS than it needs, not just for a year or two, but for a decade or two.

Tucked away in the political promises and consultant reports are hints on how money will be saved. We will have to pay more for drugs and prescriptions, and hospital will charge for many services to patients and visitors. The NHS already makes staggering sums from car park charges; it is a wonder that they do not charge private ambulances for parking.

So, reading the tealeaves, the private health sector and the health insurance industry have an opportunity to take up the slack, to design and offer services that fit with what people cannot get under the NHS at a time and place they want. This will mean new products and product redesign to offer more flexibility and more incentive for preventative medicine. It will mean a move away from take it or leave it packages to flexible and innovative policies, including value ranges offering basic cover for those who cannot afford the full cover.

Insurers will have to be very careful about not knocking the NHS, getting away from advertising that suggests rivalry. They will have to get better at niche and target marketing, and designing products that fit employee benefits for a workforce that may have to work anything up to five years longer than their parents.

The key phrase used by politicians of all hues is, personal responsibility. They sell the concept to you as good for your control of what goes on. On health, they want you to be healthier, so that the NHS spends less on you. The bit they forget to tell you is that they also mean they will, in the long run, offer you fewer free services.

Doctors and hospitals are already threatening to restrict treatment if you are obese or smoke, while certain drugs are not available if they feel you are too old. As one comic remarked, how long before the NHS refuses to treat anyone who is ill?      

Health insurance: Hot Topic: October 2009