Health insurer to buy care

Private health care is about to undergo many of the revolutionary changes that the NHS has seen, PPP, Britain's second biggest health insurer has warned.

The changes are essential to the continued survival and growth of private health care where too many hospitals are chasing too few patients and charging unacceptably high prices, Dr Harry McNeilly, PPP's medical director said.

At the same time, doctors working in the private sector do not face the same checks on their clinical skills and practice that they face when working in the NHS, Dr McNeilly said - an omission which raises issues about the quality of care in private hospitals.

To achieve the change, PPP is planning to turn itself from a medical insurer which reimburses claims, to an active purchaser of health care, operating more like a health authority or GP fundholder.

Over the coming months, PPP is to set up a "preferred provider" network, contracting with perhaps only 150 out of the 300 or so private hospitals and NHS pay bed units, to provide care for its members.

The move could mean closure for those units and private hospitals which fail to obtain "preferred provider" status. The result should be "higher quality and lower prices" for private patients, Dr McNeilly said.

Too many hospitals were chasing too few patients, he said. Bed occupancy is running at an average of only 50 per cent in private hospitals, producing "unacceptably high" prices.

Market forces cannot cut costs because private patients do not choose their hospital on the basis of cost. They are referred to a specialist by a GP.

In the private sector, Dr McNeilly said, clinical practice remains "very much the province of the individual medical specialist" who is not subject to the audit of results that is becoming commonplace in the NHS. That meant too high a rate of "inappropriate intervention and use of diagnostic services" and raised issues about the quality of care.