With the NHS effectively withdrawing its level of support, are we veering towards a hybrid US model of healthcare? How will this shape employee benefits? Dr Peter Mills investigates.
It’s probably true to say that until relatively recently, the private medical insurance (PMI) market in the UK has been distinctly lacking in innovation. It was almost as if the big players were happy to exist in equilibrium and carved out the 10% or so of the population who have PMI between themselves.
However, that torpor appears to be lifting, with some providers now offering policies for specific and niche areas such as cancer drug top-ups, defined diseases and outpatient-only services.
Depending on how successful these types of policies are in the marketplace, it is feasible that this sort of approach could be extended further – perhaps eventually even offering a ‘pick and mix’ menu-based approach to coverage where the consumer could adjust their level and type of care, together with their excess and exclusions to create a truly bespoke plan.
This kind of consumer-centric approach has gained considerable popularity in the US over the past few years, especially where employers are increasingly saying they can only afford a certain amount for healthcare coverage for each employee and no longer want to chase the ever escalating annual healthcare cost increases.
Organisations have sprung up that offer brokerage services to US employers, effectively taking the operational management of employee health out of their hands.
It is certainly feasible that a ‘lite’ version of this sort of approach could gain traction for the creation of supplemental health insurance plans here in the UK. This will be especially true if the level of service the NHS offers starts to dip.
APPLYING THE US MODEL
One area of the government’s White Paper on health that has received rather less attention than the NHS structural changes is the lifting of the artificial cap on private-earning NHS hospitals that they currently have imposed upon them. Your local hospital (NHS or Foundation Trust) will soon be able to offer as much private care as it can cater for.
This opens up the intriguing possibility of local hospitals offering local businesses special deals and rates for private treatment. Imagine the scenario of an employer who operates in a finite number of locations in the UK.
Rather than offering their employees ‘off the shelf’ PMI products from one of the main insurers as a benefit, they could offer more cost effective private medical coverage in partnership with their local hospitals.
This sort of approach could be funded through a cash plan-type vehicle, a self-funded scheme or even in conjunction with a private medical insurer.
Whatever ultimately happens, these are very interesting times for healthcare in the UK. Better value and better cost control in the whole system is an imperative – the alternative is national bankruptcy. The hope is that the different players within the ecosystem get creative and start to offer something new to consumers.
It is certain that those who do go down this route will thrive. One thing is for sure: and that is the perceived ‘value’ of supplemental healthcare coverage by employees will increase.
Dr Peter Mills is director of Medical Consultancy Glasslyn Health Solutions
