The future of private medical insurance in the UK

These are challenging times for private medical insurance (PMI). The sector has a trend of long-term decline, there are some rising costs and a challenging policy environment. The industry is all about the customer, but stories of problems such as long-winded admission, inconsistent levels of nursing care, rushed and one-sided dealings with the consultant, and hurried discharge with poor communication are common.

The customer is right to demand the highest quality care, the highest standards of service and improved affordability. So what is the way forward for PMI in the UK?

Why is the market shrinking?

Currently in the UK, individual PMI subscribers are down year on year to 1.6% in 2016. Company subscribers remain fairly stable, but as a sector only 10.6% of people have PMI.

The PMI sector touches only a small proportion of people. Many people in corporate schemes are unaware of the processes and procedures involved in their PMI policy until they come to use it which can throw up unexpected difficulties and challenges. All the things that make the private sector different – quality of care, speed and access – can be lost.

One of the biggest reasons cited for people leaving PMI is affordability of premiums. However, the sector is aware that it needs not only to make PMI more affordable, but also to reduce the inefficiencies that occur at the various stages of the pathway to improve quality and service.
The impact of increases in Insurance Premium Tax (IPT) also makes it necessary for the industry to demonstrate how it can do better in terms of quality of care and services, as well as differentiating itself in terms of clinical outcomes.

A changing market

The changing face of the PMI market offers both challenges and opportunities. A rapidly-ageing population will change the dynamics of the type of care that is sought and needed.
Changes in lifestyle and a move towards a more sedentary workforce is already resulting in increases in musculoskeletal conditions usually seen in an older population, as well as mental health issues such as stress. In the UK today, one in two people will get cancer.

The PMI sector needs to adapt to meet these changing healthcare needs. With the NHS under increasing pressure, private healthcare can provide a supporting role in many areas, particularly in elective surgery.

Employee health is also becoming an area of focus for the private medical insurers and the private healthcare sector. Employers are increasingly seeking proactive, preventative healthcare and, with strong evidence that this helps with workplace productivity, this approach is of great interest to both the business community and the government.

Another challenge for the PMI industry is to educate patients to understand the differences between self-pay, what they are entitled to on the NHS and what they can get through an insurance vehicle. Self-pay is very good for certain conditions, for example a lot of people can afford a hip or knee replacement. However, not many people can afford to self-fund some of the new immunotherapies that are now recommended, but not yet approved, by NICE. These new treatments are covered by PMI.

So in order to thrive and survive, the PMI industry has to meet the challenges of a changing market and demonstrate why someone should buy PMI or use the independent sector. Positive moves are already been seen in the industry in the form of direct access and improved monitoring of patient experience.

Direct access – delivering high quality care

In response to the needs of the population and the changing landscape of healthcare provision in the UK, we have introduced Direct Access, a self-referral service for breast and bowel cancer, cataracts, mental health and muscle, bones or joint concerns. Patients with symptoms suggestive of these conditions can access specialist advice and see a consultant without needing a GP’s referral.

Feedback from these programmes reveals a real success story that shows that when insurers and hospital providers work together they can improve patients’ lives and make a difference in a key area where other areas of the healthcare sector are struggling.

Patient experience – delivering exceptional service

The PMI industry recognises that patient experience is absolutely key and is increasingly using patient feedback not only to identify areas for improvement, but also to understand what factors are needed to offer an excellent experience. Analysis of the data shows that a good experience is often a combination of factors – consultant, admission process, nursing staff, hospital, communication and discharge process.

Funders and insurers need to work with those who are doing it well and learn from great practice. If they can deliver this each time, demonstrate exceptional service and care, and make sure it is affordable, then the future of PMI is actually bright.

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