One insurer, Clinicare, is hoping to take advantage of the situation by launching a computerised scheme which will collect dental charges monthly from patients on behalf of the dentist. In future years the individual will be called upon increasingly to start paying for treatment, or to pay more for it. 'No one believes that the momentum will slow down,' says Clinicare's managing director, Bob Bycroft.
The new edition of Laing's Review of Private Healthcare, the industry's reference bible, says that after a period of stagnation the private medical insurance industry is likely to take off again. Laing's expects 16.5 per cent of the UK population to have private insurance by the year 2000, compared to 11.2 per cent in 1993.
Companies have always been big buyers of medical insurance on behalf of their employees. As Britain emerges from recession and firms are competing harder for skilled employees, benefits packages are more likely to include medical cover, says Bob Bycroft. Individuals will also be attracted by new types of low-cost policy, perhaps offering cover for a restricted range of operations.
The industry has already been working hard to find low-cost options to combat fast spiralling medical inflation. So-called 'six- week' insurance plans, where cover only applies if you cannot get NHS treatment within six weeks, may be under threat as waiting lists persist.
The six-week plan is an indirect form of collaboration between the private insurer and the NHS. There is likely to be more cross- fertilisation between public and private sectors as time goes on. The 1,300 pay-beds run by the NHS throughout Britain will grow in number and compete more aggressively. The NHS, says Laing's Review, had a 13.4 per cent share of private patient business in 1993.
NHS private wings tend to be cheaper than private hospitals, though the surroundings may be less luxurious. One insurer, Norwich Union Healthcare, has already begun to exploit this fact with its Trustcare plan, where cover is limited to treatment in NHS private beds.
The traffic goes in the other direction as well, though the flow is still very slow; only 4.9 per cent of private hospital admissions were paid for by the NHS in 1992/93. Nuffield Hospitals report some bulk contracts for the NHS in specialised areas like hip replacements and cataracts, but some health authorities are still sensitive about the prospect of buying in from the independent sector.
Medical insurance pays for more than 70 per cent of private hospital treatment, but there are signs that non-insured payment schemes may be more widely considered in the future. Nuffield hospitals operate a fixed-rate payment scheme for non-insured patients. The scheme guarantees the cost of the treatment in advance - even in the event of complications - and offers credit payment facilities. Another developing area for Nuffield is preferred provider schemes, where large employers recommend employees to the Nuffield chain, and pay for their treatment on a case-by-case basis rather than through insurance. The hospital deals at a discounted rate because of the potentially large numbers of patients involved.
Costs are under attack everywhere. A recent report by the Monopolies and Mergers Commission found the BMA's guidelines on specialists' fees to be anti-competitive. Moves like this may give pause to the 1,300 or so specialists who earned more than pounds 100,000 from treating private patients in 1992.
Consultant power may be on the wane in other ways. Whereas the norm has always been for a GP to recommend patients to a consultant who is attached to a hospital, some doctors will now send patients direct to a Nuffield hospital, which will then suggest a specialist to deal with the case.
Day case surgery and advances like keyhole technology are predicted to lead to a 40 per cent reduction in the number of NHS beds by the next century. Norwich Union Healthcare's managing director, David Cavers, agrees that though 40 per cent of all treatment is already on a day case basis, there is scope for growth.
On the other hand, 40 per cent of hospital beds are not surgical beds and so cannot be made redundant by surgical advances. The introduction of keyhole surgery, in particular, has not been wholly straightforward. The high cost of equipment and the need for lengthy training of staff to use it have meant it has not proved a rapid, low-cost alternative.
But cheaper cover is what the individual policyholder is looking for. Half Norwich Union's 600,000 policyholders have opted for a low- cost approach. Increasingly, says Mr Cavers, people are buying private medical insurance as 'an ancillary way of funding health care'.
With more competition on price the buyers of health services - largely in the insurance companies in the private sector - will probably take on a more complex role, weighing different treatment options and 'setting standards at a better cost'. David Cavers sees a 'mixed economy' in healthcare provision in the future, with greater co-operation between state and private providers.
Private insurers promise that their aim is 'better healthcare all round'. They are 'not seeking to take over from the NHS'. However, Norwich Union would regard the area of GP care as 'interesting' if the current NHS GP contracts system changed. At present, GP contracts effectively prevent private insurers from being active in this sector.
With private insurers on the sidelines eager to snap up the juiciest plums from the troubled state system it is perhaps not surprising that the NHS has an 'attitude problem'. 'It is difficult for the NHS to understand what private medical insurers have to offer,' says David Cavers.
Individuals, too will need a better understanding of what private medical policies entail as an increasingly complex health system expects the patient increasingly to foot the bill.
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