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By Edmund Tirbutt | Published Jun 27, 2012

Getting a second opinion

Intermediaries involved with recommending private medical insurance need to be aware that restrictions being imposed on the choice of consultant at the claims stage are becoming a big issue.

Most activity is currently in the group market, following Bupa’s introduction of its ‘open referral’ process for schemes with around 250 or more lives this January, but the practice originated in the individual market and is likely to figure prominently there again in the foreseeable future.

Wayne Pontin, chairman of The Association of Medical Insurance Intermediaries, said: “Fundamentally ‘open referral’ should be welcomed because we must control costs to keep premiums sustainable and it can do this without jeopardising clinical quality, so I expect most group and individual PMI providers to offer the approach as standard within the next five years. At least one other leading group insurer is trialling something similar to Bupa’s open referral, and Axa PPP healthcare and Simplyhealth have for some time also offered discounts on group schemes in return for restricting consultant choice.”

Simplyhealth also offers such an approach in the individual PMI market through its ‘simply private health’ policy, which automatically chooses both consultant and hospital for claimants, and Standard Life Healthcare offered something similar as an option on individual PMI before being acquired by PruHealth in 2010.


Bupa’s ‘open referral’ is less restrictive than both these precedents because, although consultants are chosen by the insurer rather than by the GP, policyholders still receive a choice of two or three of them. Bupa expects to extend the approach to SMEs this summer and to the individual market this year or next. It estimates that schemes using it should see savings of up to 25 per cent cumulative over the next three years.

Critics point out that independent ComRes research conducted last November found that 74 per cent of adults would rather see a consultant recommended by their GP than choose one from a list provided by their insurer. They also cite the inability of claimants to use consultants they or their family have used before as a huge potential bone of contention at the claims stage. The same applies to claimants being unable to pay any fees over and above those covered by the policy terms to consult a specialist of their choice – something which most PMI contracts allow. Many also dispute Bupa’s argument that it is better placed to recommend consultants than most GPs.

Geoffrey Glazer, chairman of the Federation of Independent Practitioner Organisations, said: “Bupa does not have actual quality data, and last December’s Office of Fair Trading Private Healthcare Market Study reports this.”

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