What does the future hold for healthcare provision in the UK? Duncan Bradshaw explains
Healthcare provision is not a one-size-fits-all issue and it seems apparent that the future of healthcare lies beyond the NHS and also beyond private medical insurance (PMI). In the long-term, the options open to consumers have to be more flexible and cost effective.
According to research published in June 2004 by Populus, the UK public remain pessimistic about the future prospects for the NHS. Of the 1,000 people surveyed, more than four fifths believe that the quality of healthcare in the UK will decline in the next ten years, while 84% believe that change is necessary or urgent. Nearly all of those surveyed (98%) rated the time between diagnosis and treatment as important but only 18% thought that the NHS performance in this area was good.
This survey makes stark reading and is supported by Doctors for Reform, a non-party political group of NHS consultants and professors of medicine who are calling for a genuine debate on the future of healthcare.
Studies conducted by the group this year reveal that only 39% of people think that extra spending over the last few years has resulted in real improvements in the NHS. Almost three quarters think that in its present form the NHS is unlikely to ever meet public demand however much the Government invests.
Yet despite the public's perception and consequent disillusionment with the NHS, Government figures show that increased funding has had a positive impact on waiting lists with longer-term lists down in particular. There are virtually no lists longer than 12 months and some are down to nine months. However, the Government target of getting waiting lists down to six months is a much greater challenge.
The fundamental problem is that the NHS is funded by taxpayers and therefore will never be able to provide the range of services and speed of response of a PMI provider. For critical care however, the NHS is second to none so it will always play an integral role in healthcare provision.
In the 1970s and 1980s when the future of the NHS looked particularly bleak, sales of PMI boomed. Those days are now over, and the PMI market is currently struggling. Datamonitor's UK Health Insurance Report, published in 2003, revealed that the number of people in the UK with PMI fell by more than 12 % between 1997 and 2002.
This decline is due to a number of factors. Firstly, there has been a continual shift away from private, individual policies to corporate healthcare policies. Many people are also electing to pay cash for operations rather than take out insurance. Premiums have undergone dramatic increases, rising 54% over the five years since 1997 from £789 to £1,218 per year. This increase has priced out the bottom tier of PMI subscribers and the elderly, who see the cost of PMI increase with age.
Continual shift
While the public appear to lack confidence in the long-term future of the NHS, the prospect of a European-style compulsory health insurance system is not universally welcomed as the solution to the problem. Only 46% of people surveyed by Doctors for Reform support the idea that instead of paying taxes for the NHS, there should be a European-style system where everyone takes out health insurance and the Government tops up payments for people who can't afford the premiums.
With PMI premiums rising and the NHS bending under the weight of demand, the market is undoubtedly going to change.
This evolution has already started, with some lower cost solutions on offer from smaller providers and new market entrants. These tend to work by providing less comprehensive cover, or a menu of cover options. They may also shift more risk on to the consumer through a high excess policy. The menu style policies offer consumers the opportunity to pick and choose what they want to cover, and the elements selected determine the level of the premium.
In recent years, a small number of companies have entered the market offering shared responsibility plans. Essentially, with these plans, the policyholders and insurance company each opt to pay a percentage of the cost of treatment with the premium being reduced according to the level of risk the patient takes on.
Another interesting innovation is assisted self-pay plans which refund some of the costs for treatment. These are not medical insurance policies and will not pay the full cost of hospital treatment but will pay a percentage. Exactly what percentage they pay will vary depending on the premium.
Hospital cash plans are also growing in popularity. They offer fixed cash payments for every night or day a policyholder has to spend in hospital, although the amounts paid are unlikely to cover a major operation.
While the healthcare market is certainly evolving, it seems that the choice for customers is either to pay a high premium for comprehensive cover or pay less and get less - whether that is by reducing cover or paying more out of your own pocket.
The healthcare market as a whole is very supportive of the NHS, and Government initiatives to further cut waiting times and improve service are welcomed. But even if these initiatives are successful, many people will still want the peace of mind of having a healthcare safety net.
Duncan Bradshaw is membership director at Benenden Healthcare
COVER notes
• The future of healthcare lies beyond the NHS and also beyond PMI. In the long-term, the options open to consumers have to be more flexible and more cost effective.
• Datamonitor's UK Health Insurance Report, published in 2003, revealed that the number of people in the UK with PMI fell by more than 12 ¾tween 1997 and 2002.
