With change in the air for the NHS, Ian Talbot discusses the importance of absolute clarity when advising clients on private healthcare
The formation of the new coalition government and subsequent announcements in the Budget has seen many clients, both individual and corporate, re-considering their options when it comes to private healthcare. The plans outlined by the Government have forced people to look more closely at what the NHS can offer and with current financial pressures, it is becoming increasingly difficult for clients to source an affordable and sustainable alternative.
As a result of the proposed shake-up of the NHS, the role of brokers has become even more relevant. It has become even more important that they clearly outline all the available product options to clients and not just wait until renewal periods to discuss the options. Brokers need to be meeting with their customers now to reassure them of the most effective policy for their needs.
The coalition government has now published its commitment to improving the health service over the coming years. It is proposing a major restructure of the NHS which will see responsibilities moving away from the bureaucrats and managers with a focus on utilising the knowledge and skills of GPs, who will also take responsibility for spending much of the budget.
Hospitals will be moved out of the NHS and there will be more power and choice for patients, including the ability to register with any GP they wish. As a result of these plans, the NHS will be looking like a more attractive option to many and the private healthcare industry will have to respond.
Regardless of the planned improvements to the NHS, there is a common misconception amongst people that they need to make a choice between private healthcare and the NHS. This is not the case and the two can work very much in partnership. Some people mistakenly believe that if they have consultations and obtain a diagnosis privately then they are obliged to have their treatment privately as well. However, for many the best option is to visit a consultant privately, to ensure a quick diagnosis, and then receive treatment on the NHS.
A popular option
As patients have access to more information about the service levels of different NHS hospitals and are able to source treatment based upon safety standards, effectiveness and customer recommendation, this is expected to become a more popular option, if the Government’s plans to improve patient choice come to fruition.
One of the challenges brokers will face in the future is how to explain to clients that combining their private healthcare and the NHS can benefit them. Some plans cover planholders for NHS hospital stays by providing a payment, usually up to a set number of days, for every night they stay in hospital for treatment. This can be ideal for covering routine treatments with short waiting lists. Brokers could profitably highlight the products that offer these types of benefits for people that will be using the NHS for treatment.
For those clients who have private medical insurance in place, there are many advantages to splitting their consultations and treatment. Some insurers will have expert medical claims teams that can advise on the best uses of treatment providers.
For example, if a planholder claims for a private consultation and then chooses to have their treatment on the NHS, they may be able to choose a more affordable plan and still be covered for the future.
With clients currently reassessing their healthcare requirements, brokers will need to consider clients’ changing needs and identify products that work with their current circumstances. For the same reason it is important that brokers explain the range of different products that are available and the different benefits that they bring, ensuring they are being completely transparent about the areas and treatments that products cover.
It is important to educate customers that private healthcare is not, as can sometimes be perceived, a luxury product. With the vast array of plans available, private healthcare can be affordable and this needs to be clearly communicated especially during a time of reduced spending.
Sustainability and affordability are key in the current climate and brokers could be looking at products that offer fixed rate premiums, as this cost certainty allows clients to budget for their healthcare so there are no unexpected increases in premiums. Plans that offer flexibility, such as allowing planholders to increase or decrease their monthly premiums to change the amount of cover they are entitled to, will also have great appeal to clients.
Greater access to dentists
The Government is also proposing to provide one million more people with access to an NHS dentist. While this is a great step to make dental check-ups more affordable, it will not reduce the cost of procedures such as crowns which will still cost around £200 on the NHS. The vast array of healthcare products on the market that can help people with everyday treatments, such as dental, optical, physiotherapy and counselling will still appeal to clients, and brokers are in a position to be recommending products that can help fund these types of costs.
When looking at products that offer more affordable cover, brokers should not only recommend PMI products, they could also be discussing lower cost options such as cash plan-style products. As they are looking to cut costs, many PMI planholders have been looking at ways in which they can reduce their premium level and the cash plan market is changing to meet demands for more innovative products that bridge the gap between cash plans and PMI.
Traditionally cash plans have been largely formulaic, not offering planholders any real differentiation so some providers, including Bupa and National Friendly, have launched a new kind of cash plan product that offers more choice and provides an effective alternative to PMI.
It is not just the responsibility of brokers to ensure that their customers have the most effective healthcare products. Providers must also be responsive and adapt to the changing market by paying close attention to the changes that will be implemented by the Government and understand how customers will be affected. Providers must clearly outline how their existing healthcare products will work with the new government’s aims for improving healthcare, in addition to developing new ways to provide plan holders with a greater choice of benefits.
In order for the private healthcare sector to grow, it is crucial that providers work together with brokers to modify existing products and introduce new plans that meet the needs of clients. Playing their part in evolving the market, brokers and providers need to be offering clients real choice and ensuring they explain how PMI products and cash plans can be used to work in conjunction with the NHS, not instead of it.
Ian Talbot is head of commercial distribution at National Friendly
