Such strengths do not, however, provide convincing ongoing protection of the market across future generations; the industry will inevitably face an increasing need to sell to previously uninsured entities. There is already evidence of awareness and dissatisfaction among subscribers, as we see in anecdotes such as that from Bupa’s Dr Natalie-Jane MacDonald, cited in the June edition of Health Insurance, noting the complaints received from members displeased to find themselves sharing private facilities with NHS patients.
It is difficult to find optimism for a reversal of the underlying policies driving the NHS’s repositioning as a funding vehicle and its associated overlap with PMI. The changes in the NHS are root and branch. Earlier in the year Health Secretary Alan Johnson told an audience of British Medical Association members that NHS use of the private sector had, in fact, declined; but his later exasperated comment that he hoped to end the “depressing” argument about private sector usage is unlikely to be referring to a new policy of active discouragement.
Any hope of a moderation in outsourcing is unequivocally absent in Shadow Health Secretary Andrew Lansley’s prospectus for the NHS under a Tory government. The Tories’ NHS Improvement Plan states clearly: “Labour have missed a golden opportunity to work in partnership with the private sector to provide better care, not privately, but free at the point of need on the NHS.” The Plan further clarifies that: “NHS patients should be free to choose any provider of care for their treatment – so long as that provider can provide treatment at the NHS price.” Lansley’s criticism of Labour’s support of the private sector is, critically, not a question of principle, but a question of outcomes; he refers only to Labour’s failure to leverage its use of the private sector to improve efficiency.
Before public sector patients become too expectant about the future parity with private patients that the NHS may giveth, they might be reminded of what the spectral hand of health ministers may taketh away. And, indeed, it may be that top-up fees or co-payments introduce new opportunities for financial product innovation. However, it only seems likely that the overlap between the central functions of NHS patient funding and PMI will increase, with both providing comprehensive funding only for the short-term treatment of acute, curable conditions.
Returning to Dr Natalie-Jane MacDonald’s comments, it will be critical for the industry to configure products that can be judged on their overall value. Driving sales by lowering contract costs might contribute to a commoditisation process that may only harm the industry in the longer term. The industry needs genuine innovation – innovation of a higher order than the welcome extras brought to market by PruHealth. With a new competitor as daunting as the NHS looming ever larger over the marketplace, there has never been a greater need for PMI products to be developed and enhanced to provide a material and measurable improvement to the beneficiary’s engagement with the healthcare system.