The coalition government’s aim is to free up provision of healthcare, so that in most sectors of care, any willing provider can provide services, giving patients greater choice and ensuring effective competition stimulates innovation and improvements, and increases productivity within a social market. Commissioners will be free to buy services from any willing provider; and providers will compete to provide services. This may be great news to the private healthcare industry, but with benefit reform, what will insurers do?
It is no secret that recession has affected sales of health insurance products, but blaming the economy for difficulties in selling other forms of protection such as critical illness is unfair, as the struggles began in the boom years.
The insurance industry has often been accused of selling against the NHS, and in the early years of private health insurance this was true. Most companies now market on the basis that what they provide is ancillary to and complements the NHS.
One of the key selling points of health insurance, particularly for businesses and the self-employed, is the ability to choose when to go into hospital and where. So exactly how much the NHS changes from “ if you don’t go in when we say so you go to the back of or off the queue” to offering choice of time and location, matters very much to the insurance world.
But on the other hand, the NHS is likely to cut out or charge for ancillary services that can be covered by private medical or health cash insurance. There are opportunities here, including paying closer attention to areas such as fertility treatment and weight loss surgery.
It is worth reiterating the basis of the reforms:
Put patients and the public first by implementing a policy of no decision about me without me
Improve quality and healthcare outcomes through the institution of leaner structure with better-defined responsibilities
Achieve autonomy, accountability and democratic legitimacy with transparency and competition as key drivers
Cut bureaucracy and improve efficiency with challenging targets
On an individual insurer basis, bringing out more good value simple products is no longer an extra luxury, but will become essential for survival. Building products that dovetail with the changing NHS will be tough but necessary.
Insurers must move away from selling products that fit only certain consumer needs, and to a more holistic view of developing suites of products that fit consumer needs. Too often we see one section of an insurer offering product A, another section offering product B, and another unit offering product X - with little or no thought as to how the products fit together, overlap or leave gaps.
Too much is driven by what peers are doing, what intermediaries think, what historic practice is, or what can be agreed by an industry committee. Those companies ‘thinking outside the box’ have developed some interesting products, although some ideas are so complicated that how any consumer understands them is a mystery.
There is a change in mood from what government can do for you, to individual responsibility. This could be very exciting for health insurers and their customers.
Some commentators have complained that the industry has not taken the opportunity to talk to the government with insurer groups and trade bodies. I take a different view. All the trade bodies tend to do is protect the status quo, look for the lowest common denominator to dumb down any ideas, encourage the promotion of individual products that fit historic industry labels, and slow down all the process. Industry developed products such as critical illness, have been a disaster.
The more health insurers that shut their ears to moans from competitors or trade bodies that ‘you cannot do that it is not what we do’, and develop new products, the better.
Also, insurers should not be afraid to try new product ideas, as it can often be the ones that you think will not sell that do well, while the guaranteed certainty bog-standard product fails dismally.
Health insurance: Hot topic: September 2010