Protection  

What is blocking private medical insurance growth?

With UK private medical insurance penetration at 10.9 per cent, according to 2011 statistics, we welcomed the news that the Office of Fair Trading had referred the privately-funded healthcare services market to the Competition Commission for further investigation.

The commission reported a few weeks ago with some interesting provisional findings.

As a specialist medical insurance broker the choice of not only health insurer, but ultimately consultants and hospitals, is crucial to our clients. We hear more frequently from our clients that they were concerned that their GP referred them to a particular specialist consultant based on ‘soft intelligence’ such as hearsay about a consultant’s reputation.

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Many Bupa clients will find that they need an ‘open referral’ from their GP so that Bupa can discuss which consultant the patient can choose, rather than the GP. Many may argue that an insurer might be better placed and have better quality data to hand in order to discuss consultant choice with their customer. In my experience, most of our customers receive GP referrals to a particular consultant which can cause problems with the insurer should this particular consultant not be authorised.

It seems that GPs and patients lack the information they need to make informed decisions on consultants or hospitals for patient referrals.

The OFT surveyed 400 GPs and found that most believed their information needs on private healthcare facilities and consultants were not being met, in terms of both quality of care and pricing.

So, while my customers may take their GPs’ advice as the last word, there is doubt, possibly even in their own GPs’ mind, that they have the right information to choose for their patient.

The report also highlighted the importance of the GP’s role in the patient pathway. Three-quarters of GPs surveyed told the OFT they thought they were the most important influence on a patient’s choice of hospital or doctor. It is a real concern that only a small minority of consultants offer their patients a choice between their main private hospital and another facility.

Although private hospital groups publish information online, the OFT felt that this was “too variable to compare easily”. It also said that consultant-level data was “largely absent” so that patients relied on their GP’s recommendation. The NHS publishes comparable data about hospitals on the NHS Choices website and the private sector is nowhere near this level at present.

The OFT report in December 2011 described the tactics used by insurers to control costs as “blunt and potentially distortive policies” but concluded that insurers had little alternative given the absence of transparency on quality of care and fees. It also emphasised the role of ch

oice in driving competition, which is vital to intermediaries as we would become redundant if we were only comparing a few insurers for our clients.