Health insurers revive hospital pay-bed scheme

A LEADING health insurance company is offering patients private treatment inside NHS hospitals for premiums reduced by up to 25 per cent.

The scheme is expected to revitalise NHS pay-beds and is the latest example of the blurring of lines between the private and public provision of health in the new NHS market, in which hospitals sell their services to health authorities and doctors.

Other insurers are expected to follow increasing demand for and provision of pay-beds in the NHS.

There are about 3,000 private beds in NHS hospitals but there were double that number before the pay-beds row of the mid-1970s, when Barbara Castle, then Secretary of State for Social Services, attempted to ban them. The result was the rapid expansion of separate private hospitals. There were 7,000 private beds in all in independent hospitals in 1979, which grew to 11,416 by 1992. The Western Provident Association (WPA), a non-profit making society which launched the scheme yesterday, says that because of economies of scale, NHS private beds are cheaper than beds in private hospitals. This means it can offer lower-cost private health cover.

Its individual and company clients can transfer to the new scheme to avoid increases in premiums which are likely to be between 12 and 40 per cent this year.

Julian Stainton, chief executive of WPA, said that other advantages were having the consultant in the NHS hospital rather than visiting the private hospital, and having available a wide team of other specialists and a full range of equipment. Patients in the scheme could still choose where they see a consultant for an outpatient appointment, but would have their inpatient treatment in a private bed in the local NHS hospital where the consultant worked. NHS pay-beds are 20 to 30 per cent cheaper than private hospital beds.

'One London teaching hospital attracted pounds 9m last year in private income and pounds 1.4m of this went back into the NHS. It is far better that money stays in the NHS, that the surplus is reinvested, instead of funds going out of the system into a largely profit-making private sector,' he said.

If all of WPA's clients transferred to the comprehensive in-patient scheme then pounds 50m a year would be raised for the NHS. Quoting William Beveridge, founder of the welfare state, Mr Stainton said it was originally envisaged that the NHS would provide hospital care to minimum standards, leaving people free to choose how to spend any surplus money.

'We are going back to the very roots of the NHS, to the tenets on which it was founded,' he said.

At the same time, premiums for private health insurance have risen sharply from about pounds 270 a year for a London family in 1981 to pounds 1,818 in 1992.

In the WPA scheme called 'Maple', a typical figure for a single person aged 40-44 outside London would be pounds 310.20 a year for an NHS pay-bed, against pounds 450.90 for WPA's most expensive policy and pounds 248.20 for its cheapest. If there is no NHS pay-bed available, then WPA pays a per diem amount to cover private hospital costs. Mr Stainton said that that could be a shortfall of between 15 and 30 per cent, but it was advising clients to negotiate charges with the hospital.