“Treatment tends to be much more intensive now,” says Julian Ross, head of marketing and communications at Standard Life Healthcare. “Where people used to be admitted on an inpatient basis for weeks, inpatient stays are much shorter and there’s a greater emphasis on outpatient treatment.
This is certainly the case the most common cause of psychiatric inpatient treatment claim, depression, where providing outpatient therapy is more acceptable now. Likewise, with another common claim, eating disorders, the length of inpatient treatment is much shorter and supplemented with outpatient treatment.
“Because the nature of treatment has changed we’ve become more flexible with the benefit, allowing customers to use their inpatient benefit for day-patient and outpatient treatment where necessary,” adds Ross.
While the situation with psychiatric claims demonstrates how insurer policy and advances in medicine can help to reduce the cost of claims, insurers are always on the look out for the next big financial threat.
“All sorts of new drugs and procedures are under development that will affect future medical insurance claims costs,” says Aon’s Bennett. “In addition to all the cancer drugs that are being developed we’re just beginning to scratch the surface with robotics and nanotechnology.”
An example of this is the robotic prostate surgery that is currently being trialled. This uses a tiny robot, controlled by computer by the surgeon, to remove the prostate. This makes the procedure less invasive but also more accurate, which improves survival rates.
It is likely that this technique will become commonplace in other areas of surgery too, pushing costs up as hospitals look to invest in the new technology.
Medical advances do not always mean more expensive treatment either. “New procedures can be significantly cheaper to administer,” says Smith. As an example he points to keyhole surgery, where not only is the cost of surgery lower but the reduction in inpatient stay also helps to reduce the overall cost of the treatment.
From an insurance perspective, it is not simply a case of cost-cutting though. “It’s a balance for the insurer,” adds Smith. “The cost of the treatment may be lower but the reduced risk involved with the new procedure means that it is suitable for more people so the insurer may end up paying out more because of the increased volume in claims.”
So, while cancer may dominate the financial discussions, insurers are mindful that there are other areas where costs could put pressure on future claims funds.