The future of PMI

The evolution of health insurance is likely to continue, characterised by an increasingly international scope and scientific considerations. Ron Buchan gives his insights

The most important development in the short, medium and long term for private medical insurance (PMI) is that it will continue to evolve towards more geographically flexible cover.

This trend is being driven by two factors: population mobility and changes in the way medicine is being practised.

Currently, most domestic health insurance provides cover only in the country where the insured member is living, with potentially some element of cover for emergency treatment abroad.

This is due to the fact that historically, each country has developed its own individual way of delivering medical care, and quite often the rules related to health insurance vary, resulting in health insurance geographically limited to that particular country.

Domestic health insurers understand their own country and its market, but they have limited visibility on the provision of medical care outside of their country.

They have an established relationship with the medical network in their home country, but they don’t have the partnerships in place to facilitate the treatment of their members abroad.

Yet this traditional framework is becoming increasingly at odds with the market it serves. People are, by their very nature, mobile. They travel, often regularly and extensively on business or for leisure.

Medical tourism, whereby people choose to go abroad either for certain treatments or feel like they have to due to a strained healthcare system at home, continues to grow, particularly in Asia.

With technology and communications systems, it is also much easier than ever before to work remotely.

Health insurance needs to keep pace with the increased mobility and changing lifestyle of the people it covers.

As the market moves to rectify this situation over time, the distinction between international and domestic health insurance will continue to blur.

The other driver in this trend towards more portable cover relates to developments in the practice of medicine. In the past 20 years, there has been an increase in medical specialisation, with the result that patients often have to travel to different regions to seek treatment (essentially, they have to go to where the specialist is).

Historically, doctors specialised in different organs or systems. However, these specialities have evolved over the years into sub-specialities.

Expertise has deepened within those areas as the focus narrowed more and more into a defined area of skill.

At the same time, the number and breadth of sub-specialists increased.

SHORT AND MEDIUM TERM CHANGES

For example, in orthopaedic surgery which is concerned with the musculoskeletal system there has been the emergence of sub-specialities such as hip and knee surgery, joint replacement, knee sports injuries and cartilage transplants.

Surgeons choose a speciality and focus on mastering one or two skills, becoming experts in only one or two procedures.